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Merck anti-baldness drug Propecia has long trail of suicide reports, records show

Newly unsealed court documents and other records show that Merck & Co and U.S. regulators knew about reports of suicidal behavior in men taking the company’s anti-baldness treatment Propecia when they decided not to warn consumers of those potential risks in a 2011 update of the popular drug’s label.

Internal records from Merck were made public in late January, when a federal magistrate in Brooklyn, New York, granted a 2019 Reuters motion to unseal 11 documents filed in years of litigation alleging Propecia caused persistent sexual dysfunction and other harmful side effects.

Since the 2011 decision on the warning, the FDA has received more than 700 reports of suicide and suicidal thoughts among people taking Propecia or generic versions of the drug. Those included at least 100 deaths. Before that, in the first 14 years the drug was on the market, the agency received 34 such reports, including 10 deaths.

Annual U.S. prescriptions of finasteride, as the drug is known, for hair loss increased to over 2.4 million in 2020, more than double the number in 2015, according to health data company IQVIA.

European and Canadian regulators, citing similar reports among men taking finasteride, require a warning of suicidal thoughts on the label, though they note that research has not proved that the drug causes such thoughts. To this day, the U.S. label contains no mention of suicide or suicidal thoughts.

As early as 2009, Merck knew of more than 200 reports of depression, including suicidal thoughts, in men taking Propecia, according to an internal “risk management” assessment from that year. The company decided there were too few reports of serious depression and suicidal behavior and not enough specifics about those cases to warrant more than “routine” monitoring of safety data.

In 2011, two years after the Merck risk analysis, the FDA was weighing a company request to add “depression” to the drug’s label as a potential risk, with no warnings related to suicide. FDA analysts disagreed about adding a warning related to suicide, according to previously unreported government documents. But the regulator ultimately agreed with Merck’s request on the grounds that the number of suicides was lower than one would expect in this group of patients.

CALLS FOR TRANSPARENCY

Some medical researchers and patient advocates said Merck and the FDA have left American consumers in the dark about potentially life-threatening dangers associated with finasteride.

“No family should ever have to learn about this after the fact,” said Kim Witczak, a consumer advocate who serves on an FDA advisory panel for psychiatric drugs. She has called for drug companies and regulators to issue stronger warnings after her husband died from suicide in 2003 five weeks after being prescribed an antidepressant for insomnia. Merck “had an opportunity to put suicide on the label, but they didn’t want to do that because it’s all about sales.”

Michael Irwig, an endocrinologist and Harvard Medical School faculty member whose own research has found possible links between finasteride and suicidal behaviors, said Merck’s handling of the risk analysis and the FDA’s inaction keep critical information from the public. Merck “definitely should have provided a more complete picture,” Irwig said.

In a statement to Reuters, Merck said that “the scientific evidence does not support a causal link between Propecia and suicide or suicidal ideation and these terms should not be included in the labeling” for the drug. “Merck works continuously with regulators to ensure that potential safety signals are carefully analyzed and, if appropriate, included in the label for Propecia.”

Merck has said in past statements that Propecia has been prescribed safely to millions of men since the late 1990s. It also has argued in court that “premature hair loss itself, the very condition for which Propecia is prescribed, is associated with low self-esteem, poor body image, and depression.”

In a statement, FDA said it “continues to monitor postmarketing safety data for Propecia.” Overall, the agency noted that the presence of a report in the FDA database “does not mean the drug caused the adverse event” and medical problems may stem from the “underlying disease being treated, caused by some other drug being taken concurrently, or occurred for other reasons.”

FDA declined to comment further about its handling of Propecia and reports related to suicide.

Merck’s analysis of a potential suicide risk stayed secret in court for over three years — and only became public after Reuters intervened in the proceeding. The insights in the recently unsealed documents echo findings from Reuters’ 2019 investigation, “Hidden Injustice,” which revealed how U.S. judges routinely allow makers of consumer products to file under seal in lawsuits information that is pertinent to public health and safety. They often do so without explanation, though in most jurisdictions, they are required to provide one.

The Reuters investigation found that hundreds of thousands of Americans have been killed or seriously injured in recent decades by allegedly defective products — including drugs, cars and medical devices — while evidence that could have alerted consumers and regulators to potential danger remained hidden.

In granting Reuters’ motion to unseal Merck documents, U.S. Magistrate Judge Peggy Kuo last month ruled that the company’s arguments for continued secrecy “are so weak that they would not overcome even a low presumption of access under the common law.”

INTERNAL DIFFERENCES

In addition to the risk management plan, Kuo unsealed other Merck documents including an internal marketing report from prior to the drug’s launch and some communications with regulators regarding sexual dysfunction. Reuters obtained the FDA documents discussing suicide from a separate online repository maintained by the agency.

In 2010, while reviewing Merck’s proposal to add potential depression risk to Propecia’s label, an FDA safety evaluator recommended also adding a warning for suicidal thoughts and behavior, noting nine suicides and reports of other suicidal behaviors among patients who took finasteride, the FDA documents reviewed by Reuters show.

The reports of suicidal behavior analyzed by Merck and government regulators, known as “adverse event” reports, are filed by consumers, doctors and other members of the public. They are compiled in a public database by U.S. regulators, as well as drug-safety agencies in other countries.

In her November 2010 report, FDA safety evaluator Namita Kothary wrote that the nine suicides were difficult to assess due to incomplete information. “However, we cannot exclude that finasteride may have contributed to the events,” she wrote. Kothary did not respond to requests for comment.

Two other FDA reviewers disagreed. The two physicians — Amy Woitach and David Kettl — said the data supported adding depression to the label. Suicidal ideation, however, should be left off because the number of suicidal thoughts, attempts and deaths was “lower than would be expected in this patient population,” according to their December 2010 report. Kettl and Woitach did not respond to requests for comment.

The European Medicines Agency found the relationship between finasteride and depression was hard to assess, but still required a warning about suicidal ideation in 2017, in part because Propecia is not prescribed for a serious condition, according to EMA committee meeting minutes. Doctors and patients generally weigh risks differently for a drug to treat a life-threatening health problem, versus something less severe.

When Health Canada required its warning in 2019, it noted 368 international reports of suicidal events reported in patients treated with finasteride through September 2018. Merck did not respond to questions about these regulatory moves.

The FDA approved Propecia in 1997, and sales climbed steadily through the 2000s, peaking at $447 million in 2010. Soon after, Merck’s patent expired. Overall sales of finasteride have remained strong as cheaper generic versions have hit the market.

PERSISTENT DYSFUNCTION

The new information regarding a potential suicide risk emerged as a result of longstanding controversy about sexual problems associated with the drugs.

From the beginning, Merck’s label said Propecia caused sexual dysfunction in nearly 4% of its clinical study participants. However, the 2009 risk management report also shows that the company was aware of reports that those sexual problems continued for some men after they stopped taking the drug.

The FDA in 2012 approved Merck’s request to add a warning of erectile dysfunction that continued after stopping the drug, as well as “libido disorders, ejaculation disorders, and orgasm disorders.” Even so, Merck at the time said scientific evidence did not establish that Propecia caused persistent sexual dysfunction.

The warning prompted more than 1,100 lawsuits against Merck by men alleging their sexual problems lasted long after they stopped taking Propecia. Merck in 2018 agreed to settle most of the lawsuits consolidated before Judge Brian Cogan in Brooklyn federal court for a combined $4.3 million.

Reuters reported in 2019 that prior to the settlement, plaintiffs’ lawyers had alleged that Merck, when revising the drug’s original label, understated the number of men who experienced sexual symptoms in clinical trials and how long those symptoms lasted. The allegation was part of a sealed court brief a Reuters reporter was able to read because of a redaction error. The brief cited internal Merck communications, filed under seal. Reuters intervened in the case, seeking to unseal those communications.

“IMPORTANT POTENTIAL RISK”

The 2009 risk management report unsealed last month shows that while depression did not emerge as a risk in clinical trials, Merck deemed it an “important potential risk” after the company received 218 global reports of depression from 1998 to 2008. Of those, 10 involved serious depression, and an additional nine involved suicidal behavior.

Merck noted limitations with both the depression reports and the nine involving suicidal behavior. Four provided “insufficient information to allow a full evaluation.” Three of the men had other medical conditions, and for two, the symptoms developed after they stopped taking the drug.

“One fatal report was received from a sheriff’s office and described a male who committed suicide by shooting,” according to the report. “The medical examiner did not think this event was related to Propecia, in addition, the report provided insufficient information to allow for assessment.”

The report contained no additional details about the patient’s identity or the medical examiner’s investigation. Merck did not respond to questions about what steps it took to learn more about the case.

In its statement to Reuters, Merck said adverse event reports reflect only the opinions of the person who files them. “While consumers and healthcare professionals are encouraged to report adverse events, the reaction may have been related to the underlying disease being treated, or caused by some other drug being taken concurrently, or occurred for other reasons,” the company said.

Dr W. Vaughn McCall, chairman of the Department of Psychiatry and Health Behavior at the Medical College of Georgia, agreed that relying on adverse event reports to monitor drug safety has its limitations. However, he said one of those limitations is that injuries and deaths are often underreported because people aren’t familiar with the process or don’t have time to examine a specific case.

He said there is a plausible biological explanation for a potential link between Propecia and suicidal thoughts. The drug reduces a testosterone-related hormone, which in turn could impact an anti-depressive steroid produced in the body.

“There is a reason to be suspicious,” McCall said. – Reuters

Lending falls for 1st time in 14 years

Bank lending contracted for the first time in over 14 years in December. — BW FILE PHOTO

By Luz Wendy T. Noble, Reporter

BANK LENDING contracted for the first time in over 14 years in December, as lenders tightened credit standards and demand for loans remained weak amid the recession.

Outstanding loans by big banks dropped by 0.7% year on year in December to P9.178 trillion from P9.242 trillion a year ago, data from the Bangko Sentral ng Pilipinas (BSP) released on Wednesday  showed.

This is a reversal from the already meager 0.5% growth in November and the first decline since September 2006 when it fell by 1.9%, according to the BSP Department of Economic Research.

“The drop (in year on year terms) in business loans could be traced to lower appetite or demand from firms or businesses, specifically from large enterprises, and to some extent the relatively stricter bank loan standards,” BSP Deputy Governor Chuchi G. Fonacier said in a text message to BusinessWorld.

Inclusive of reverse repurchase agreements, bank lending also slipped 0.7% in December from the 0.6% expansion the prior month.

“With nonperforming loans on the rise and the job market in shambles, we can expect bank lending to remain in contraction for the next couple of months as both consumer and corporate demand may be subdued given the sour economic outlook,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

As of end-November, bad loans climbed 73.6% to P404.687 billion from P233.064 billion a year ago. It also picked up by 2.43% from the P394.432 billion as of end-October.

With this, the nonperforming loan ratio of the industry reached 3.81% as of end-November. The BSP expects this to have reached 4.6% by end-December.

The bad loan ratio peaked at 17.6% in 2002 in the aftermath of the Asian financial crisis.

Based on BSP data, credit extended to businesses, which made up 87.2% of the total, slipped by 0.4% year on year after growing by 0.7% in November.

BSP data also showed a large contraction in the borrowings of firms within the following sectors: mining (-9.4%); wholesale and retail trade and repair of motor vehicles and motorcycles industry (-6.8%); education (-6.8%) followed by manufacturing (-5.2%); and financial and insurance activities (-4.6%).

Meanwhile, lending growth was seen in industries such as real estate (5.3%); electricity, gas, steam, and air conditioning supply (3.8%); human health and social work activities (49.2%); information and communication (5.3%); and transportation and storage (5%).

For consumer loans, growth slowed to 4.4% in December from 7.1% in November. This, as motor vehicle loans saw a steeper decline of 5.3% (from -3.3%), while credit cards (4.4% from 7.1%) and salary-based loans (9.3% from 11.3%) expanded at a slower pace.

“The BSP’s monetary policy stance remains accommodative in support of credit demand as a complement to fiscal initiatives which remain crucial in ensuring public welfare and directly supporting spending by firms and households,” the central bank said.

Last year, the BSP slashed rates by 200 basis points, bringing down the overnight reverse repurchase, lending, and deposit facilities to record lows of 2%, 2.5, and 1.5%, respectively. However, the BSP’s aggressive easing meant to support recovery and encourage lending came at a time when banks tightened credit standards and borrower confidence weakened.

Asian Institute of Management economist John Paolo R. Rivera said the more stringent lending standards are expected as the crisis reduces incomes.

“This [stricter lending standards] will hamper economic growth recovery because money has to circulate to perform transactions and investments that fuel the economy,” he said in an e-mail, noting banks will need a form of “reassurance” to be lured into lending more.

The Financial Institutions Strategic Transfer (FIST) bill is already awaiting to be signed by President Rodrigo R. Duterte. When enacted, it will help banks reduce NPLs by freeing up nonperforming assets to asset management companies.

M3 GROWTH
Meanwhile, liquidity growth eased further for the seventh consecutive month, reflecting the tepid bank lending activity.

M3 — considered to be the broadest measure of liquidity in an economy — rose 9.5% in December to P14.207 billion from P12.976 billion a year ago. The expansion was slower than the 10.5% print in November and marked the seventh straight month of easing since June’s 14.9%, BSP data showed.

Month on month, M3 increased by 0.7%.

Domestic claims during the month grew 4.7%, easing from the 6.7% in November.

Net borrowings by the central government expanded 31.8%, much slower than the 40.7% the prior month.

Meanwhile, net foreign assets in peso terms picked up 25.2%, faster than the 22.9% in November.

On the other hand, net foreign assets held by other depository corporations rose by a slower pace of 69.4% from 75.8%.

“The overall stance of monetary policy is expected to remain accommodative while economic recovery gets underway,” the BSP said.

“The BSP stands ready to deploy further monetary policy measures as necessary in order to ensure adequate support to economic activity while maintaining price and financial stability.”

BSP officials have said ample liquidity remains in the system and have vowed to keep rates low. The first policy-setting meeting of the Monetary Board is set on Feb. 11.

CREATE now awaits Duterte’s signature

By Charmaine A. Tadalan and Beatrice M. Laforga, Reporters

CONGRESS ratified on Wednesday the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) law,  which will cut corporate income tax (CIT), streamline fiscal incentives and ease coronavirus disease 2019 (COVID-19) vaccine importation.

The final version of CREATE will now be sent to Malacañang for President Rodrigo R. Duterte’s signature.

It will immediately slash CIT to 25% from 30% which is currently one of the highest in Southeast Asia. It further cuts corporate income tax to 20% for micro, small, and medium enterprises with net taxable income below P5 million and total assets below P100 million.

“Hopefully, this will be implemented soon, as CREATE can be a ventilator that will help companies in ICU, or prevent them from entering one,” Senator Ralph G. Recto said in his explanation of vote.

The CIT reduction will retroactively take effect on July 1, 2020.

“This will be a game changer for all businesses — both big and small — who need as much support as they can get during this time of global health and economic crisis,” Senator Pia S. Cayetano said in her sponsorship speech during Wednesday’s session.

CREATE will also lower the minimum CIT to 1% from 2% from July 2020 to June 2023, as well as taxes on nonprofit hospitals and educational institutions to 1% from 10% within the same period.

The measure, which was originally known as the Corporate Income Tax and Incentives Reform Act (CITIRA), also streamlines the government’s fiscal incentives program.

CREATE will also grant up to 17 years of incentives to exporters and domestic enterprises, identified as “critical” by the National Economic and Development Authority. This covers 4-7 years of income tax holiday (ITH) and 10 years of 5% special CIT (SCIT) or enhanced deductions.

Other domestic enterprises will be entitled to 4-7 years of ITH and 5 years of SCIT or Enhanced Deductions for enterprises with investment capital of at least P500 million; and 4-7 years ITH and 5 years of enhanced deductions for those with less than P500 million.

VAT-FREE VACCINES
In response to the pandemic, lawmakers included a provision in CREATE that will exempt the importation of COVID-19 vaccines from value-added tax and import duties. Imports of COVID-19 medicines and personal protective equipment will also be VAT-free, but only until December 2023.

Medicines for cancer, mental illness, tuberculosis, and kidney diseases, meanwhile, will be exempt from VAT, starting Jan. 1, 2021.

“My fervent prayer is that these should not be vetoed by the President. He will lose his credentials as our consoler-in-chief if he will thumb down our proposal to remove the tax on the medicines of people fighting for their lives,” Mr. Recto said.

House Ways and Means Committee chairman and Albay 2nd District Rep. Jose Maria Clemente S. Salceda said CREATE is the “greatest economic reform”’ second to the proposed economic revisions of the 1987 Constitution.

“I expect at least P12 trillion in combined domestic and foreign trade investment over the next decade due to CREATE alone. $90 billion of that will be foreign direct investments,” he said in a statement.

Senator Richard J. Gordon, however, reiterated his opposition to the provision in the measure that will subject major investments to the evaluation of the Fiscal Incentives Review Board (FIRB). He was also the lone senator to vote against the passage of the bill in the Senate last November.

“If I’m not mistaken, it took a while in the Bicameral Conference Committee because the people of Central Luzon and others, where there were freeport zones expressed their desire to change a certain amendment,” he said during the session.

“I did not take part in that but if that’s an indication that not everybody is in unison, hindi sumama lahat sa pakay na malagay sa isang body, ’yung FIRB ang talagang  pagtanggap ng malalaking negosyo sa Pilipinas, nakakatakot iyon sa aking palagay.”

This is in reference to the P1-billion investment threshold for projects that will need to secure approval from the FIRB. Investment projects below P1 billion will only be evaluated by investment promotion agencies.

LOOPHOLE
The Action for Economic Reforms (AER) also flagged certain provisions of CREATE, including a “big hole” that would be opened if incentives under franchise licenses granted by lawmakers will be exempted from FIRB’s scrutiny.

In a Viber message to BusinessWorld, Filomeno S. Sta. Ana III, the coordinator for the nongovernment organization, warned that the provision exempting the tax perks given through legislative franchises from the FIRB’s review process could be prone to abuse.

“The bicam obviously wants to protect San Miguel Aerocity and other franchises. That’s going to be a big hole that will be gamed by vested interests to get incentives without being subject to rigorous scrutiny,” Mr. Sta. Ana said on Tuesday.

Mr. Sta Ana said the bicam report contained a provision under the third chapter of the bill stating:

“Notwithstanding the preceding tax and duty provisions, tax and duty incentives granted through legislative franchises shall be exempted from the foregoing expanded powers of the Fiscal Incentives Review Board to review, withdraw, suspend or cancel tax incentives and subsidies.”

One of the legislative franchises currently pending in Congress is Senate Bill 1823 which grants San Miguel Aerocity a 50-year franchise, with a 10 years’ worth of tax exemptions over the Bulacan airport’s construction period.

Also, Mr. Sta. Ana said they wanted the existing threshold for low-cost housing and residential lots eligible for VAT-exemption to be kept at P2.5 million and P1.5 million, respectively, as “the values stayed in the bicam bill are anyhow beyond reach of the workers.”

Mr. Sta. Ana said the bicam report increased the threshold to up to P2.5 million for low-cost housing and up to P4.2 million for residential lots.

“[Further], giving exemption on duties and taxes to local refineries is obviously discriminatory. Oil refineries are not even part of the SIPP (Strategic Investments Priority Plan),” he added.

Asked if the AER will ask the Office of the President for a line veto on these provisions, Mr. Sta. Ana said “Yes. Vested interests are strong.”

Despite this, he said the “bicam bill retains the bottom-line positions for a good reform,” stating it allowed incentives to be time-bound, performance-based, transparent and regulated through the FIRB.

He also noted the bill’s inclusion of non-exporters in export zones that provide inputs to exporters to be eligible for VAT exemption and the expansion of businesses considered as strategic industries that could avail of tax perks. — with inputs from G.M.Cortez

Average Download Speed Between the Richest and Poorest Philippine Cities

NEARLY a million Filipinos in rural areas do not have access to digital connections, as most cell towers are located in wealthy cities, according to an analysis by Asian Development Bank (ADB) and Thinking Machines Data Science, Inc. Read the full story.

Average Download Speed Between the Richest and Poorest Philippine Cities

Digital gap between rich and poor PHL cities persists

Residents of the five wealthiest cities in the country enjoy an average fixed broadband download speed of 25.65 megabits per second (Mbps), while those in the five poorest cities experience 4.62 Mbps. — PHILIPPINE STAR/MICHAEL VARCAS

By Arjay L. Balinbin, Senior Reporter

NEARLY a million Filipinos in rural areas do not have access to digital connections, as most cell towers are located in wealthy cities, according to an analysis by Asian Development Bank (ADB) and Thinking Machines Data Science, Inc.

The report was authored by Stephanie Sy, chief executive officer of Thinking Machines; Bruno Carrasco, chief of governance thematic group, ADB; and Hanif Rahemtulla, principal public management specialist, ADB.

Only 9.5% of the 9.4 million Filipinos in poor areas live within 500 meters from a cell tower, ADB and Thinking Machines said in an analysis published on Feb. 1, citing data from the Project Bandwidth and Signal Strength (BASS).

“This leaves almost 850,000 Filipinos beyond the scope of cell site serviceability,” the authors said.

Cities with high wealth levels typically have higher internet speeds as compared with poor cities.

Areas with high wealth and fast speeds are in Luzon, Central Luzon, and Cebu, while areas with low wealth and low speeds are in the peripheries of Northern Luzon, Palawan, Eastern Visayas, and Northern Mindanao.

Digital inequality is apparent when comparing the average download speeds for five richest Philippine cities with the five poorest cities. Residents of the five wealthiest cities in the country enjoy an average fixed broadband download speed of 25.65 megabits per second (Mbps), while those in the five poorest cities experience 4.62 Mbps.

As for the average mobile download speed, those living in the richest cities experience 25.77 Mbps, while users in the poorest cities only get 7.04 Mbps.

The ADB-Thinking Machines analysis noted sufficient internet speed in the Philippines is at least 3.2 Mbps, and only 6% of the population in the poorest cities have access to it as compared with the 100% rate in the wealthy cities.

“For instance, 100% of the population in San Juan, Metro Manila have access to sufficient internet speeds, while only 6.22% and 4.14% of the population in Burgos, Surigao del Norte have sufficient access on fixed and mobile, respectively,” the authors said.

Clusters of cell towers are found in urban areas like Cebu City, Puerto Princesa, and Davao City, “but none of these compare to the breadth and density of towers in Metro Manila with the largest concentration of cell sites.”

There are also large gaps in mountainous areas in the northern Philippines, they said.

Eastern Visayas  has the largest last mile population without sufficient internet access to fixed broadband, while Central Visayas has the largest last mile population without access to sufficient mobile speeds.

“Up to 600,000 people on mobile and up to 1.4 million people on fixed broadband either have speeds slower than 3.2 Mbps or did not run a speedtest and are thus not included in the Ookla data,” the analysis said.

Aside from BASS statistics, the ADB and Thinking Machines also used data from Speedtest by Seattle-based Ookla LLC. to analyze spatial patterns of digital inequality.

Their objective is “to better inform and target strategic investments for digital development” using big data and machine learning.

“The insufficiency of digital infrastructures in the country is a result of multiple factors, including stringent restrictions in the telecommunications market leading to a lack of competition and high barriers to entry,” they said.

Malacañang has said the National Government would continue to exert more pressure on telecommunications firms to improve their services.

Presidential Spokesperson Harry L. Roque, Jr. earlier said, citing a report by Ookla, mobile download speeds improved by 202.4% between July 2016 and December 2020, while fixed broadband speeds rose 297.47% during the same period.

Globe Telecom, Inc. Chief Technology Officer Gil B. Genio said at BusinessWorld Insights online forum in October last year that remote areas might see better connectivity in three years with legislation shortening the permit waiting times for cellular towers.

Globe targets to put up 2,000 cell towers this year. It built 1,300 new cell sites last year.

PLDT Inc.’s wireless arm Smart Communications, Inc. built 700 new cell sites last year, and it also plans to roll out 2,000 more this year.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Average Download Speed Between the Richest and Poorest Philippine Cities

BIR targets 13% higher excise tax collection for 2021

The Bureau of Internal Revenue (BIR) is streamlining the requirements and procedures for claiming value-added tax (VAT) refunds. — BW FILE PHOTO

THE Bureau of Internal Revenue (BIR) is aiming to increase excise tax revenues by 13% this year, as it expects economic activity to pick up as pandemic-related restrictions are further eased.

The BIR set a P332.102-billion excise tax collection target for 2021, 12.6% higher than the P294.91 billion collected last year. Excise tax collections from large taxpayers slumped by 7% in 2020, due to the strict lockdown measures and economic slowdown.

The BIR attributed the higher target to the Development Budget Coordination Committee (DBCC) projection that the Philippine economy will return to a growth trajectory this year.

Excise tax collections from tobacco products, alcoholic and sweetened beverages, fuel, and automobiles, among others, will make up 16% of the BIR’s total collection target for the year.

The BIR set a P2.081-trillion collection target for 2021, 7% bigger than the P1.94 trillion collected last year.

BIR Deputy Commissioner for Operations Arnel S.D. Guballa said in a text message the bureau is “hopeful” it will attain its collection goal for 2021.

The agency is aiming to collect P984.65 billion from taxes on net income and profits, up 31% from last year’s target of P751 billion.

The value-added tax (VAT) collection goal has also been raised by 16% to P405.25 billion, from P350 billion in 2020.

The BIR aims to raise collection from percentage tax by 8.92% to P129.292 billion, and other taxes by 23% to P166.05 billion.

The targets have been computed based on DBCC projections of 6.5-7.5% gross domestic product (GDP) growth for 2021.

VAT REFUND STREAMLINED
Meanwhile, the BIR said it is streamlining the requirements and procedures for claiming VAT refunds.

Revenue Memorandum Order (RMO) No. 47-2020, which took effect on Jan. 19, cut the total number of documentary requirements needed for applicants availing of the VAT refund to 30, from 39 previously.

The number of documents from local offices that require certification have also been trimmed to five from 16 previously.

“Most notable under this RMO is the substantial reduction of the number of documentary requirements and the non-submission of the photocopies of sales invoices or receipts for both purchases and sales of goods or services. Instead, the taxpayer claimant availing of the VAT refund is only required to show the original copies of the said documents together with the corresponding scanned copies stored in a memory device,” the BIR said.

Moreover, several documents that need to be certified or consularized/apostilled were no longer required or have become optional on the part of the taxpayer-claimants.

Notarized sworn affidavits needed have also been trimmed to two from five.

CUSTOMS COLLECTIONS
In a separate statement, the Bureau of Customs (BoC) said its Post Clearance Audit Group (PCAG) is expecting to collect P12 billion from the 24 pending demand letters this year. Eighteen have filed a motion for reconsideration, while the remaining eight have been referred to the Customs Legal Service.

It raised an additional P191.38 million in duties and taxes from its audit of importers last month.

“The BoC, through the PCAG is steadfast in its mission and mandate of collecting lawful revenues through ascertaining the payment of appropriate duties and taxes as the nation gears towards economic recovery amidst the current health crisis,” it said. — Beatrice M. Laforga

Flexible, nimble millennials usher changes in work spaces

By Jenina P. Ibañez, Reporter

MILLENNIAL leadership is creating more flexible and productive workplaces, business leaders said, highlighting the changes in the organizations they help steer.

“Creativity is how (millennials) exhibit their productivity and results,” Cirtek Holdings Philippines Corp. Chief Financial Officer Brian Gregory T. Liu said at the BusinessWorld Insights event on Wednesday.

The workplace culture, Mr. Liu said, is changing, with leaders prompting more flexible work time and spaces along with “favorable” benefits to back creativity.

“We’ve created a new platform where work is more flexible and you can be more productive through this flexibility,” he said during the forum.

Mr. Liu said he emphasizes the need to develop a level playing field at work, allowing employees opportunities to succeed regardless of introversion, resumé, family background, or alma mater.

“That highlights the key importance of human resource management. You need to be able to identify individuals’ key strengths and weaknesses,” he said.

Marvin Tiu-Lim, chief growth and development officer at Mega Global Corp., said technological savviness, purposefulness of company vision, and an entrepreneurial mindset are important to the generation.

He said that leaders must be nimble, with businesses quickly changing in response to crises like the pandemic.

“Education has changed. Doing business has changed… what we have to have is adaptability to that change. Why do we have to force fit ourselves into a box that has been given to us throughout time and throughout tradition?” he said.

George I. Royeca, chief transport advocate at Angkas, said that millennials are team-oriented, creating stronger or community-based relationships in the workplace.

“Before, that was seen as a negative — being too personal in the workplace… but one thing that we started to realize is you can’t take out the person wherever you are.”

He said that through technology, millennial leaders tend to focus on being productive anywhere instead of working in just a single office environment.

“Unfortunately, that gives you that ‘always on’ syndrome, which may lead to mental illness,” he said.

But while the business leaders explained how millennials have developed distinct leadership styles, they also noted the lessons that can be learned from older generations.

“Patience, consistency — there are a lot of things that need to happen over time. You can’t rush certain things,” Mr. Royeca said. “Use technology, make it more efficient, but still have that level of patience that we can learn from our parent and our former leaders.”

Despite this, the executives said that some myths about millennials need to be broken, noting a millennial focus on growth and the top line.

Mr. Tiu-Lim said he would prefer to focus on growing the top line as opposed to cutting down expenses.

“The emphasis on moving forward and growth with millennials is often misunderstood as being brash and I think that’s a big myth,” Mr. Royeca said. “They know what they’re doing. They’re actually learned, they read a lot, they have a lot of information at their fingertips. It’s not just a rash decision that they go into.”

Pho24 opens first of three restaurants this year

Plans are to expand eventually to 100 branches

WHEN a restaurant says their slogan is “Cooked slow and served fast,” one shouldn’t  wonder about the speed of their expansion. Pho24, another one of Jollibee Foods Corp.’s foreign conquests — these would include The Coffee Bean and Tea Leaf and Tim Ho Wan, plus the Philippine franchises for Burger King and Panda Express — is slated to open 100 stores, with three immediately opening this year. The first of the three branches (and the second one in the country so far) opened earlier this week in Jollibee Tower in Ortigas Center. Jollibee acquired 60% ownership in the SuperFoods Group that owns the Highlands Coffee and Pho24 brands.

“This signals our expansion, aligned with our mission to share the joy of eating authentically delicious, good value for money pho to everyone, everywhere,” said Ned Bandojo, Business Development Head for Pho24, in a webinar on Jan. 27.

The restaurant laid down its roots in Vietnam in 2003, taking its name from the 24 ingredients that go into the noodle soup, sometimes considered as Vietnam’s national dish. According to Julius dela Cruz, Marketing Head for Pho24, their broth, the backbone of the dish, is made from beef shin bones simmered for eight hours. “We really take pride in our slogan, which is cooked slow and served fast,” he said.

They launched Pho24 kits late last year, to cover demand during the delivery-crazed pandemic. BusinessWorld got a taste and found that the broth had unexpected depth and nuance. “With COVID-19 happening, it actually became the springboard for us to launch our newest product (the Pho 24 kits),” said Mr. Dela Cruz.

The pho meal kit, priced at P540 for delivery, contains ingredients for two servings of the chain’s Beef Fillet Pho. It also has a Fried Spring Rolls pack containing 12 rolls and Vietnamese dipping sauce, priced at P360 for delivery transactions. The meal kits can be purchased via delivery through Facebook Online ordering and food delivery apps GrabFood, Foodpanda, and LalaFood. The restaurant’ pho menu includes its flagship PHO24 beef fillet and PHO24 chicken pho; as well as its other noodle variants, beef brisket, beef meatballs, and 3 Types of Beef. There are also non-pho options like Saigon Fried Chicken, Shaking Beef and Savory Pork Chop rice meal options and Vermicelli Spring Rolls. For dessert there are Banh flan, taro in coconut cream, and yogurt.

Asked about embarking on an expansion during a period of uncertainty, Mr. Bandojo said, “Things have been very hard — of course, we all know that. No one was spared from this one. With Pho24, we’re very confident about this product and we are very, very sure that once people get to experience that ‘un-pho-gettable’ experience with [us], you will surely look for more.”

So much so, in fact, that Mr. Bandojo got a seal of approval from Pho24’s home country; noting the numbers of Vietnamese customers in their original branch in Double Dragon Plaza in Pasay City. “To us, if you see Vietnamese and Chinese people dining at Pho24, that is the ultimate seal of authenticity.” — Joseph L. Garcia

AllHome opens fourth branch in Mindanao

ALLHOME Corp. has opened a branch in General Santos City as the Villar-led company expands its store network across the country.

In a statement on Wednesday, AllHome said the new store is on a 7,600-square meter location in Purok 9, Barangay Katangawan, and is the company’s fourth branch in Mindanao.

The other AllHome branches in Mindanao are in Cagayan de Oro, Butuan City, and Koronadal City.

The new branch is a large free-standing store that provides contractors, architects, interior designers, and homeowners access to home-building products and services.

According to AllHome, the branch brings the company’s store network to 51 locations across 30 cities and municipalities in the Philippines.

“This is AllHome’s 14th large free-standing format store, while large mall-based stores and small specialty format stores number at 22 and 15, respectively,” the company said.

“AllHome aims to bring world-class shopping experience to more locations across the Philippines. We want every Filipino to have the best choices in building and furnishing their homes,” AllHome Vice-Chairman Camille A. Villar said.

AllHome Chairman Manuel B. Villar, Jr. said the company’s expansion efforts are based on its optimism towards market recovery in 2021.

“As we continue to navigate the new normal, we deem it important to reach outside Metro Manila to cater to new markets,” Mr. Villar said.

Meanwhile, the company assured that its branches implement stringent pandemic measures such as temperature checks, while facilities such as elevators and escalators are sanitized daily after store hours.

On Wednesday, AllHome shares at the stock exchange declined 2.30% or 20 centavos to finish at P8.50 apiece. — Revin Mikhael D. Ochave

Term deposit rates drop despite lower demand

YIELDS ON THE Bangko Sentral ng Pilipinas’ (BSP) term deposits continued to slip despite lower bids on Wednesday, on the back of market optimism over the passage of a key tax reform law seen to support the country’s economic recovery.

Total demand for the central bank’s term deposit facility (TDF) reached P661.872 billion on Wednesday, higher than the P630-billion offering but failing to beat the P704.768 billion in bids seen a week ago.

Broken down, tenders for the one-week papers amounted to P210.61 billion, lower than the P240 billion auctioned off by the BSP as well as the P272.499 billion in bids logged last week.

Accepted rates for the seven-day term deposits ranged from 1.59% to 1.75%, picking up from the 1.5875% to 1.64% band a week ago. This caused the average rate of the papers to settle at 1.6157%, slipping by 0.63 basis point (bp) from the 1.622% recorded on Jan. 27.

Meanwhile, bids for the 14-day papers amounted to P451.262 billion, surpassing the P390 billion on the auction block and the P432.269 billion in tenders received last week.

Banks asked for yields ranging from 1.6% to 1.638%, a slimmer margin compared with the 1.6% to 1.6525% band a week ago. With this, the average rate for the two-week term deposits went down by 1.44 bps to 1.6256% from the 1.64% quoted previously.

The BSP did not offer the 28-day term deposits for the 16th straight week. This follows the start of BSP’s weekly offerings of short-term bills with the same tenor.

The TDF and BSP securities are among the tools used by the central bank to gather excess liquidity in the financial system and to better guide market interest rates.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that Wednesday’s auction results show there continues to be ample liquidity in the system despite the lower bids seen yesterday versus last week.

He added the lower yields were backed by positive sentiment from investors pricing in the passage of the Corporate Recovery and Tax Incentives for Enterprise Act.

The Bicameral Conference Committee on Monday approved the reconciled version of the bill seeking to immediately lower down the corporate income tax to 25% from 30%. It is expected to be ratified within this week.

Tailor-fitted to address the pandemic, the measure is the revised version of the Corporate Income Tax and Incentives Rationalization Act. Among provisions of the reconciled bill is granting incentives to exporters and “critical” domestic enterprises for up to 17 years. — Luz Wendy T. Noble

Ovialand sees P1-B home loan takeouts with Pag-IBIG Fund

OVIALAND, Inc. is targeting P1 billion in home loan takeouts with state agency Pag-IBIG Fund in 2021 as demand for affordable shelter continues to grow, the housing developer said.

Ovialand President Marie Leonore Fatima O. Vital said in a statement on Wednesday that the company plans to complete 600 housing units this year across its four development projects in Laguna and Quezon provinces.

She added that 70% of the said house and lot units had already been sold, with the home-buyers awaiting the turnover.

“When 2020 began, we already had a commitment to our clients to deliver to them their homes. As first time homebuyers, their need for their own comfortable home became even more apparent during the pandemic. When real estate was allowed to restart, we had no time to waste,” Ms. Vital said.

For 2021, she said Ovialand is prepared to meet consumer needs as demand for house and lot units continue to go up, adding that many Filipinos are still looking for their first home despite the ongoing coronavirus disease 2019 (COVID-19) pandemic.

“Pandemic or not, our nation is at the cusp of a new generation. 75% of homebuyers are millennials who are starting their young families and this pandemic has made many realize the need to prioritize a home investment rather than careless spending,” Ms. Vital said.

She said the representatives of Pag-IBIG Fund had gone beyond their duty to assist developers during the COVID-19 pandemic.

“They were able to quickly shift to maximizing the use of technology in verifying loan applications and conducting unit inspections. We supported them 100% because we understood that these safeguards in loan processing cannot be sacrificed,” Ms. Vital said.

Ovialand’s existing projects are mostly located in Southern Luzon, such as in San Pablo, Laguna and Candelaria, Quezon. These are all horizontal house and lot projects priced between P2.2 million and P2.8 million. — Revin Mikhael D. Ochave

Try making prawn potstickers at home for Chinese New Year

By Richard Vines

ANDREW WONG this week became the first chef ever to win two Michelin stars for a Chinese restaurant in the UK.

It’s long been difficult to get a table at A. Wong, in London, and it’s now impossible because it is closed by the coronavirus lockdown. So we’re lucky to get a chance to try one of Andrew’s dishes this week: He has given Bloomberg a simple recipe for prawn potstickers at home. This crispy dumpling recipe comes just in time for Chinese New Year on Feb. 12.

The main difficulty I had was in tracking down gyoza wrappers, even online. As for the cooking, I didn’t manage to seal all the dumplings at my first attempt because I’d allowed the skins to dry out. Andrew says you should keep them under a damp cloth.

The strangest thing was the instruction to throw the filling mixture onto a board 20 times. I slapped the mixture on my kitchen table repeatedly and watched bits of prawn flying off around the room. A day later, I am still finding them. In fact, I think I just sat on one.

The recipe is for 25 dumplings. I don’t know how many that is supposed to serve but I can tell you how many were left in my fridge the following morning. None. I ate through the lot while watching Schitt’s Creek. Andrew offers a choice of dips. I used both but wouldn’t bother with the bought-in sauce another time. The recipe specifies red vinegar, which I misread as red-wine vinegar, rather than Chinese red vinegar. But Andrew says any vinegar will do as the main point is the acidity.

INGREDIENTS:

250 grams of prawns

15 grams sugar

6 grams salt

1 gram pepper

8 grams potato starch

20 grams Trex

(vegetable shortening)

5 grams sesame oil

20 milliliters water

1 tablespoon of finely

chopped spring onion

25 gyoza wrappers

For dip:

25 milliliters red vinegar

3 grams ginger

or 50 milliliters Lee Kum Kee Sauce for Dumplings (optional)

Preparation:

Cut a 2 millimeter slice from each end of each prawn and set aside.

Using the flat side of your knife, smash down onto each of the prawns to create a puree. (Do not blend in a mixer.) You really need to bash them hard. A cleaver works better than a knife if you have one.

Add the offcuts from the prawns and all the ingredients to the paste and mix vigorously with your hands.

Pick up the mixture and throw onto a board. Repeat this process 20 times. Place in a bowl and refrigerate for 20 minutes.

Get your dumpling sheets and add one teaspoon of mixture into the middle of the circle.

Dot the edges of the pastry very lightly with water, then fold over the sheet to seal the filling into the wrapper.

When sealed, press the dumpling down to create a flat base.

COOKING:

Get a nonstick pan and add 1 tablespoon of vegetable oil. When the oil is hot, place the dumplings one by one into the pan, standing upright. Leave to cook until the bottom of the dumpling becomes toasted.

Add 100ml of water to the pan and cover with a lid, leaving the lid slightly ajar. (Because there is hot oil in the pan, it will spit when you add water so be careful.) Leave the dumplings to cook for 10 minutes and until the water is all evaporated. When the pan is dry, add a little more oil to re-crisp the bottom of the dumpling.

Remove from the pan onto a plate and serve with 25ml of red vinegar with a few strands of sliced ginger inside, or the ready-made sauce in the ingredients list. — Bloomberg

Richard Vines is Chief Food Critic at Bloomberg. Follow him on Twitter @richardvines and Instagram @richard.vines