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US Fed signals lighter touch on bank supervision, foreign bank oversight

WASHINGTON — The US Federal Reserve on Friday signaled it would take a lighter touch when supervising banks, in another win for the industry which has long complained that the regulator’s closed-door supervisory process is opaque and capricious.

In particular, foreign lenders Deutsche Bank, Credit Suisse, UBS and Barclays should no longer be held to the same supervisory standard as big US banks after shrinking their combined US assets by more than 50% over the past decade, said Fed Governor Randal Quarles.

“We have been giving significant thought to the composition of our supervisory portfolios and, in particular, to whether and how we should address the significant decrease in size and risk profile of the foreign firms,” Mr. Quarles, who is also vice chair for Fed supervision, told a Washington conference.

His comments come as the Fed pivots from rewriting a raft of rules introduced following the 2007-2009 global financial crisis, to reviewing the way it puts them into practice.

While regulation draws bright lines on what lenders can and cannot do, Fed supervisors have discretion as to how those often highly complex rules are interpreted and implemented daily by each institution depending on their business profile.

Banks have complained that the Fed’s supervisory process, which is confidential, is too inflexible and applied unevenly and have lobbied for greater transparency and predictability.

The Fed supervises institutions according to different buckets, with the eight riskiest US banks and UBS, Credit Suisse, Deutsche and Barclays, subject to the strictest scrutiny.

On Friday, Mr. Quarles said it no longer made sense to hold those foreign lenders to the same standard as the likes of Wells Fargo and Citigroup because their riskiness has declined. He suggested supervising them in line with regional banks such as PNC or Capital One, potentially changing the competitive landscape for firms in that bucket.

In addition, Mr. Quarles outlined a number of “incremental” changes to the broader supervisory system that he said should “increase transparency, accountability and fairness.”

These include allowing banks to share confidential supervisory information with third parties, such as consultants, to make it easier for them to fix issues; limiting the number of written slaps on the wrist the Fed dishes out to banks for minor lapses; and increasing the transparency of models it uses to test banks’ resilience to potential economic shocks. — Reuters

Trade deal not expected to affect China’s other agriculture suppliers

BEIJING — China’s other suppliers of agricultural commodities will not be impacted by the Sino-US trade deal since buying will be based on market principles, Vice Premier Liu He said, according to a report from state-owned CCTV on Thursday.

Liu was speaking on Wednesday at a press briefing after signing the Phase 1 trade deal with US President Donald Trump. The agreement includes a pledge by China to buy an additional at least $12.5 billion worth of agricultural goods in 2020, and at least $19.5 billion more than the 2017 level of $24 billion in 2021.

Chinese companies will import US agricultural goods according to consumers’ need, and demand and supply in the market, Liu told the reporters, according to state-owned CCTV.

“The China market is a very important part of the international market now. It is not that like any country can export as many products (to China) as they want. Rather you need show the competitiveness of the product,” he said.

Liu’s comments underscore the uncertainty that remains about the deal and how China will implement the uptick in US imports after an 18 month trade dispute that caused Chinese agricultural buyers to shift their supply chains.

To reach the purchase target, China will need to increase its buying by intervening in the agricultural products market without upsetting its current trade partners, said a China-based grains trader with an international trading firm who is not allowed to speak to the media.

“The government will intervene to some extent, like asking state firms to buy or providing some quotas,” but China is basically letting all nations compete and offer better priced products, the trader said.

Under the deal, Beijing did not reduce or remove additional tariffs on US farm products introduced in retaliation to US tariffs.

Competition between US and Brazilian soybean supplies will be a focus as there are concerns China could cancel some Brazilian imports to bolster its US purchases.

China buys about 80% of Brazil’s soybean exports.

US soybean imports are expected to be 35 million tonnes in 2020 as it has already bought soybeans from Brazil for the year, Li Qiang, chief analyst with Shanghai-based consultancy JC Intelligence said.

China uses soybeans to crush into cooking oil and soymeal for animal feed. Demand has declined as the African swine fever disease has decimated its pig herd.

“[China will] probably get some tariff exemptions for pork and soybeans going forward,” INTL FCStone Senior Asia Commodity Analyst Darin Friedrichs said in a note to clients. However, he believes the phase 1 agriculture purchases are difficult to achieve.

Other analyst believe China can implement the pledge.

“If some US products do not have advantage in price or do not have enough output, there are many other US agriculture products available that China can increase imports of, like meats, and ethanol,” Li from JCI said. — Reuters

Lunar New Year Style

Gucci releases Lunar New Year Mickey Mouse styles

GUCCI celebrates the Year of the Mouse with a dedicated collection of special items that feature Walt Disney’s Mickey Mouse. Mickey, the most iconic of Disney’s characters, has been playfully incorporated into a full range of items, from shoes and bags to small leather goods, scarves and clothing. Many new designs appear among an array of classic Gucci pieces. The collection has a vintage spirit, where Disney’s timeless star seems to have hijacked many of the House motifs. Mickey is already found in Gucci’s autumn/winter collections for men and women, where he features on a number of items, from T-shirts and sweatshirts, to dresses, tops and trousers, and on a bomber jacket and windbreaker. He also makes a guest appearance on some Gucci prints. However, for the Lunar New Year, a whole collection around Mickey has been made in honor of the Year of the Mouse. The Lunar New Year collection includes the Mini GG Supreme canvas with Mickey Mouse print, a beige and ebony fabric that features a vintage Mini GG print with Mickey Mouse in varying scale. This print has been introduced in reference to a House fabric from the 1980s, and the original pattern, color and look of this has been reproduced through the use of high-definition digital printing. A protective coating and embossing give the appearance and texture of linen. These items often include inside a brown leather tag that identifies this as an official collaboration with Disney. For handbags there is a small shoulder bag in Mini GG Supreme with a small Mickey in a repeat pattern. A small bucket bag in the same fabric has a large Mickey Mouse standing on the front panel. There is a version of this in plain beige leather too, also with a large Mickey in the same position. All the handbags have ochre leather trim, as do the small leather goods, which also come in the new Mini GG Supreme fabric featuring Mickey Mouse as a repeat pattern. For women there are continental and zip-around wallets, two card cases, a mini bag, a mini backpack and a passport case. For men, there are classic wallets and a pouch. Matching iPhone covers come in different sizes for different models of phone. For luggage, the cartoon character is rendered as a small repeat pattern on the Mini GG background on backpacks, a double shoulder tote, a top handle tote, a round shoulder bag and a belt bag. There are also soft and rigid luggage sets in the same fabric including trolley cases, as well as a small and large hat case and even a hard guitar case. A new Gucci Tennis 1977 women’s sneaker, a slip-on sneaker, a rubber-soled slide and the Princetown slipper with lambswool lining, all come in Mini GG Supreme fabric with Mickey multiplied in miniature all over. In addition, the Ace sneaker is presented in the same material with a larger single Mickey. Men have the styles plus a high-top sneaker. For both men’s and women’s shoes, a single, large, lying down Mickey Mouse appears on an ivory leather base in both the Ace and Rhyton trainer styles. Every women’s and men’s ready-to-wear item in the Lunar New Year collection will be sold with a special green label and swing ticket featuring Mickey Mouse and “Disney x Gucci” text. The Lunar New Year collection has its own dedicated packaging. In the Philippines, Gucci (exclusively distributed by Stores Specialists, Inc.) is located at Greenbelt 4 and Shangri-La Plaza East Wing.

Keds has Lunar New Year shoes

KEDS KICKS off the New Year with an update to its Kickstart silhouette. The iconic sneaker brand drops its Chinese New Year Exclusive, Year of the Rat sneaker just in time for the New Year festivities. The shoe features supple leather, shining gold-toned detail and hardware. This special Keds Kickstart has gold eyelets and a removable rat charm and is made with the brand’s Dream Foam insole. Keds stores are located at Glorietta 3, U.P. Town Center, SM North EDSA The Block, SM Megamall, Robinsons Magnolia, Robinsons Manila, Festival Alabang, SM City Baguio, Robinsons Ilocos, Ayala Center Cebu, SM City Bacolod, SM City Iloilo, Gaisano Mall Davao, and Centrio Cagayan De Oro. Keds are also available in Complex Lifestyle Stores at Shangri-La Plaza Mall, TriNoma Mall, Eastwood Mall, Fairview Terraces, Uptown BGC, Glorietta 5, Alabang Town Center, Festival Supermall, Solenad-3 Nuvali, Marquee Mall, and Robinsons Galleria Cebu.

Michael Kors and the Lunar New Year

FOR Lunar New Year gifting, Michael Kors suggests ultra-luxe Cece bag with a special jeweled clasp, eye-catching gold and red jewelry pieces, and the Maci watch with a chic embossed leather strap in a lucky red hue. And this year’s money envelopes are embossed with the Michael Kors Signature logo pattern and are available in select stores worldwide. In the Philippines, Michael Kors is exclusively distributed by Stores Specialists, Inc., and is located at Central Square in Bonifacio High Street Central, Greenbelt 5, Newport Mall, Power Plant Mall, Rustan’s Makati, and Shangri-La Plaza Mall.

Peugeot to offer free inspection, car wash

WITH the recent volcanic activity of Taal Volcano resulting in extreme ashfall covering most of Metro Manila and the Southern Part of Luzon, Peugeot Philippines is offering free inspection and car wash to all their clients. The inspection will specifically cover the AC and engine systems together with some external vehicle operational functions, ie. wiper blades, tires, brakes, etc. And as an additional service to Peugeot owners, Peugeot Philippines will also provide free car wash after the inspection.

Protecting cars and upholding the stellar performance of Peugeot vehicles has always been a top priority for Peugeot. Volcanic ash has a high tendency to damage cars from the exterior appearance such as the paint and windshield and the mechanical overall health including but not limited to the engine and AC system as the main concerns. The inspection will also help lessen the chance of any road accidents by improving the quality of the tires, brakes as well as other external and internal issues.

Peugeot Philippines prioritizes its customers’ safety. This free inspection program is the company’s way of ensuring that the car and the driver are given the care and attention that they deserve. Motion and Emotion come hand in hand with the services of Peugeot Philippines. The free inspection and car wash will start on Monday, Jan. 20, 2020 and will be available at the Peugeot Pasig and Peugeot Alabang dealerships.

Shares to trade sideways ahead of Q4 GDP data

By Denise A. Valdez
Reporter

TRADING at the stock market is seen to stay quiet until the government’s scheduled release of its gross domestic product (GDP) report this week.

The benchmark Philippine Stock Exchange index (PSEi) climbed 69.40 points or 0.90% to close at 7,722.58 on Friday. However, the main index fell 54 points or 7% on a weekly basis due to the muted four-day trading.

“Taal Volcano’s unexpected eruption that spewed ashes as far as the metropolis kept investors on tentative note for most of the week, shrugging off the signing of phase one US-China trade accord,” online brokerage 2TradeAsia.com said in a market note.

While average value turnover last week improved 25% to P7 billion, net foreign selling also expanded to P1.4 billion from P1.2 billion in the week prior.

“[T]he main index could not seem to catch a break ending lower, marking its second consecutive week of losses. However, it was able to close the week above the 7,700 key support level after breaking below it several time throughout the week,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun noted.

Heading into the new week, Mr. Mangun said investors are likely to stay silent amid the fading of their “new year’s optimism” and the continuous threat of a bigger natural calamity in Taal.

“The new year’s optimism that most investors had is slowly vanishing as the market continues to move sideways. Coupled with the threat of a major disaster, as the Taal volcano rumbles, investors have turned cautious again as no one wants to be holding the bag if things get worse,” he said.

But Mr. Mangun said investor interest may improve because of the release of the fourth-quarter GDP report by the Philippine Statistics Authority.

“This will prove if the government’s fiscal policy in the last twelve months has effectively spurred economic growth,” he said.

The Philippine Statistics Authority will report official fourth quarter and 2019 GDP data on Jan. 23.

AAA Southeast Equities is expecting GDP growth in the fourth quarter of 2019 to have come in at 6.5% at least.

For 2TradeAsia.com, this week’s trading will still largely take cues from the Taal volcano events. “In an extreme explosion scenario, it is…worth to note fiscal pump-priming follows next,” it said.

It also said the market may still enjoy some positive investor sentiment from the signing of the US-China phase one deal last week, which it noted should be seen as a “work-in-progress.”

“The list of attractive companies have already expanded, and it only takes a matter of time before these take notice. Position gradually on dips and hold. Immediate support is 7,600 resistance, 7,850-7,950,” 2TradeAsia.com said.

How PSEi member stocks performed — January 17, 2020

Here’s a quick glance at how PSEi stocks fared on Friday, January 17, 2020.

 

NEDA TWG studying road congestion pricing

THE government is evaluating at technical working group (TWG) level a proposal for a peak hours congestion pricing system in key parts of Metro Manila, a Transportation department official said.

The Department of Transportation (DoTr) said it submitted its proposal to impose congestion charges in Metro Manila’s business districts.

“It was submitted to NEDA (the National Economic Development Authority) for their initial evaluation, and it is with a NEDA technical working group. We are doing this in partnership with the Singapore government,” Transportation Undersecretary Mark Richmund M. de Leon told in BusinessWorld in an interview on Jan. 7.

He said the government of Singapore is providing both the concept and the technology to implement the congestion-pricing scheme.

“Kung ma-approve na ’yun sa NEDA, tuloy-tuloy na ’yung proyekto (Once NEDA approves it, the project will go ahead),” he said, referring to the proposal which was submitted to the agency in “November or December.”

He said the proposal covers congestion charges in business districts during peak hours.

“The objective of the proposal is to remove the congestion in central business areas (CBAs), so you pay. If you want to use your car during peak hours, you pay a certain amount,” Mr. De leon said.

He noted that there is an oversupply of cars on Metro Manila’s roads. “Regardless of how good our bus system is, there’s terrible traffic along EDSA, vehicles are not moving, so what we need is to reduce cars,” he added.

According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA), auto sales in 2019 totaled 369,941 vehicles, up 3.5%.

Current legislation aimed at discouraging the proliferation of automobiles include a proposed Proof of Parking Space Act, which would bar auto purchases if the buyer does not own a place to park. Car owners without parking sports or garages typically park on the street, hampering traffic flow.

A September study by the Asian Development Bank (ADB) found Metro Manila to be the “most congested” city in developing Asia.

The bank said rapid growth in car ownership and the demand for road capacity that it generates has given rise to congestion in many Philippine cities. — Arjay L. Balinbin

Taal Volcano agricultural damage exceeds P3 billion, led by fisheries

CROP DAMAGE due to Taal’s eruption was estimated at P3.17 billion a week after the volcano started emitting ash, with the fisheries sector accounting for more than half of the total, the Department of Agriculture (DA) said.

In a bulletin issued Saturday night, the DA noted that the ashfall damaged 43,772 metric tons (MT) of agricultural commodities, over 15,790 hectares of land in CALABARZON, which is composed of Cavite, Laguna, Batangas, Rizal, and Quezon.

It also “caused the death of 55,881 head of various farm animals. The large increase in animal deaths was due to the additional reports from validated areas in Batangas and Cavite.”

Fisheries accounted for 50.5% or P1.6 billion equivalent to 6,000 fish cages. Affected municipalities include Talisay, Laurel, Agoncillo, and San Nicolas, Batangas.

The pineapple industry accounted for 16.6% or P527.25 million. This covers 862 hectares and 21,079 MT of pineapple, mainly affecting General Trias, Amadeo, and Silang, Cavite.

Coffee damage was P360.5 million, or 11.4% of the total, over 4,309 hectares, equivalent to 8,240 MT of damaged production. Areas affected include Taal, Agoncillo, Lemery, San Nicolas, Laurel, Balete, and Talisay, all in Batangas; Calamba and Cabuyao in Laguna; and Amadeo and Silang in Cavite.

Damage to the coconut crop was P188 million or 5.9% of the total, affecting 8,700 hectares in Batangas.

Damage to the banana crop was P138.59 million, or 4.4% of the total, over 821 hectares with 7,338 MT of damaged production. Affected areas were San Nicolas, Batangas and Amadeo, General Trias, and Silang, Cavite.

Damage to the fruit and vegetable crop was P124.13 million, or 3.9% of the total, covering 197 hectares and 1,453 MT of production. Areas affected include Tanauan, San Nicolas, Balete, Cuenca, Alitagtag, Taal, Santa Teresita, Calaca, Agoncillo and Laurel in Batangas, and Silang, Amadeo, General Trias, and Magallanes in Cavite.

Corn damage was P88.9 million and livestock P20.1 million. — Vincent Mariel P. Galang

BIR sets goals for regional offices; Makati told to collect P129.5B

THE Bureau of Internal Revenue (BIR) has released the collection targets for its various regional offices, led by its Makati operation, which has been set a goal of P129.51 billion.

According to Revenue Memorandum Order No. 2-2020 dated Jan. 15 issued by Commissioner Caesar R. Dulay, the agency’s 19 implementing offices this year are tasked to collect a total of P821.935 billion, or about 31% of the BIR’s P2.576 trillion revenue goal for the year.

The next-largest target set for a regional office was P123.7 billion for its South NCR branch.

The Bureau’s overall full-year target includes a projected P90 billion in additional revenue generated by higher excise taxes imposed by the Tax Reform Acceleration and Inclusion (TRAIN) Act.

The overall target includes P1.673 trillion for the large taxpayers service, P453.58 billion from excise taxes, P66.528 billion from final withholding taxes on bank deposits, P7.57 billion from Malampaya and P10 billion from tax administration upgrades.

The non-BIR operations category is projected to raise P80.8 billion, including withholding taxes on deposits and documentary stamp taxes on government securities.

Other regional offices with top collection targets were Quezon City (P96.43 billion), East NCR (P90.15 billion), City of Manila (P57.24 billion) and the so-called Cabamiro office, covering Cavite, Batangas, Mindoro and Romblon (P47.46 billion).

Meanwhile, those with collection targets of P10 billion or less were Butuan City (P5.74 billion), Cordillera Administrative Region office (P6.98 billion), Zamboanga City (P7.26 billion), Eastern Visayas (P8.06 billion) and Koronadal City (P9.45 billion).

The Department of Finance (DoF) reported earlier that BIR, the country’s largest tax-collecting agency, missed its target by 6.8% last year, collecting P2.172 trillion against a P2.33 trillion goal.

The BIR’s 2019 performance beat the 2018 total by 10.67%.

BIR collections accounted for 77.57% of government revenue last year. — Beatrice M. Laforga

Fuel marking volumes top two billion liters

THE total volume of fuel marked as of Jan. 18 has topped two billion liters, Finance Secretary Carlos G. Dominguez III said, citing a report from the Bureau of Customs (BoC).

The total includes fuel marked by the Bureau of Internal Revenue (BIR) of around 600 million liters.

Fuel marking is an anti-smuggling measure. Fuel that has passed the various stages of tax compliance is marked by a special dye. The absence of a marker dye can be taken as prima facie evidence that no taxes were paid on the fuel.

The Department of Finance (DoF) reported that in 2019 the government marked a little over one billion liters.

Nine oil companies have participated in the program: Unioil Petroleum Philippines, Inc., Chevron Philippines, Inc., Phoenix Petroleum, Seaoil Philippines Inc., Pilipinas Shell Petroleum Corp., Insular Oil Corp., Filoil Energy Company, In., PTT Philippines Corp. and Petron Corp.

The volumes marked are well below initial estimates. In February 2019, authorities estimated that they can mark at least 15 billion liters of fuel products in 2019, with the BoC projecting around 6.8 billion liters of gasoline, diesel and kerosene imports while the BIR expected to mark around 8.4 billion liters processed by domestic refineries. — Beatrice M. Laforga

Nov. GOCC subsidies grow 46%

STATE SUBSIDIES to government-owned and -controlled corporations (GOCCs) grew 46.11% year-on-year to P11.815 billion in November, the Bureau of the Treasury (BTr) said.

According to the bureau’s cash operations report, the November total rose 63% from October.

In the 11 months to November, subsidies totaled P170.551 billion, against P187.1 billion budgeted for the year.

Philippine Health Insurance Corp. received the most budgetary support in November at P3.98 billion, up 44% year-on-year, followed by P2.758 billion for the National Irrigation Administration, up 62%, and P1.904 billion for the National Housing Authority.

Other top subsidy-receiving GOCCs were the Local Water Utilities Administration with P909 million, the Philippine Crop Insurance Corp. P772 billion, the Bases Conversion Development Authority P408 million, the Philippine Postal Corp. P271 million and the Philippine Heart Center P123 million.

Other state agencies that received more than P50 million worth of budgetary support in November were the Philippine National Railways with P81 million, the Philippine Children’s Medical Center P76 million, the Sugar Regulatory Administration P74 million, the National Kidney Transplant Institute P59 million, the Cultural Center of the Philippines P57 million and the Lung Center of the Philippines P51 million.

Those left unsubsidized were Land Bank of the Philippines, the National Electrification Administration, the National Food Authority, the National Power Corp., the Development Academy of the Philippines, the Small Business Corp. and the Social Housing Finance Corp. — Beatrice M. Laforga

Estate tax amnesty for non-resident Pinoys: Yay or nay?

Among all the internal revenue taxes imposed in the Philippines, estate tax is arguably one of the most neglected. It is not uncommon to see estate taxes remain unpaid for several years after the death of the decedent until the heirs see the need to transfer the inherited property. These properties then remain idle with their economic benefit unutilized.

Thus, the much-anticipated Estate Tax Amnesty program was welcomed when the President signed it on Feb. 14, 2019. This program provides a one-time opportunity to settle estate tax obligations at a reduced tax rate and with no penalties.

In a nutshell, the estate tax amnesty allows unpaid estate tax obligations to be settled at the rate of 6%, without any penalties imposed. This covers the estates of decedents who passed away on or before Dec. 31, 2017, with or without tax assessments issued by the Bureau of Internal Revenue (BIR) and that have remained unpaid as of the same date. The amnesty also covers “undeclared estates” or properties that were not included in a previously filed estate tax return and not subjected to estate tax.

The 6% amnesty tax rate is imposed on the net estate of the decedent at the time of death. This means that the estate can take advantage of the deductions that are available under the Tax Code as of the time of the decedent’s death.

AVAILING OF THE ESTATE TAX AMNESTY
The estate tax amnesty return (ETAR) shall be filed with the BIR Revenue District Office (RDO) that has jurisdiction over the place of residence of the decedent, who must be a resident of the Philippines, or of the executor/administrator in the Philippines if the decedent was a non-resident. If the estate has no executor or administrator in the Philippines, the ETAR will be filed with BIR RDO No. 39 in Quezon City. Following Revenue Memorandum Order No. 33-2019, the Certificate of Availment and the Electronic Certificate Authorizing Registration (eCAR), which authorizes the transfer of the estate properties to the heirs, shall be issued within 15 calendar days from the receipt of the validated Acceptance Payment Form and proof of payment of the Estate Amnesty Tax.

The estate tax amnesty is available for two years, starting June 15, 2019 and ending June 14, 2021. Any estate that fails to take advantage of the tax amnesty within the period given will be subject to the graduated estate tax rate that was in effect as of Dec. 31, 2017, with interests and penalties also due upon payment.

The law was good news to Filipinos in the Philippines as well as those residing overseas who are heirs to unsettled Philippine-based estates with unpaid taxes. Many Filipinos who have settled abroad with their families have expressed their preference to settle the estates and sell off Philippine-based properties.

CHALLENGES FOR NON-RESIDENT FILIPINOS
However, there are challenges for non-resident Filipinos who wish to take advantage of the tax amnesty.

One challenge is the availability of documents required by the ETAR. Under Revenue Regulations (RR) No. 6-2019, documents pertaining to the value of the properties within the estate must be attached to the ETAR to provide a basis for the tax base and the resulting estate amnesty tax payable.

If, for example, the decedent passed away decades ago, there is a good chance that the heirs no longer have documents that indicate the value of the properties as of the time of the decedent’s death. This can cause difficulty in proving the actual value of the properties, since it is certain that these properties were worth far less at the time when the decedent died than their current fair market value. Without the relevant documents, it will be difficult to determine the actual value of the decedent’s estate, and the resulting basis to compute the estate amnesty tax.

Another challenge for non-resident heirs is how to determine the actual properties that comprise their parents’ or grandparents’ estates. In some cases, the heirs had already migrated to other countries, leaving their parents behind in the Philippines. When the parents are gone, there is a chance that the survivors have no clear idea about the nature or number of properties that were left behind. As they have no resources in the Philippines to obtain information on their parents’ properties, the likely result is an ETAR that may not include all the properties that actually belonged to the decedent.

A third challenge for non-resident Filipinos is the actual filing of the ETAR and payment with the bank. Non-residents usually prefer to remit payments online or through wire transfer. However, the amnesty regulations require the physical filing of the ETAR and payment through BIR authorized-agent banks. To avail of the amnesty would require that the non-resident return to the Philippines or to authorize a representative for this purpose.

POTENTIAL COURSES OF ACTION
With the way that the regulations for estate tax amnesty are currently worded, non-resident Filipinos have the option to authorize representatives in the Philippines to file and process the applications on their behalf, without having to come to the Philippines themselves. Where a proper authorization is in order, these representatives can assist in determining the properties covered by the estate, preparing and submitting the ETAR to the BIR, making the actual payment, and claiming the eCAR to be issued to the estate.

In determining the properties that may be covered by the estate, the heirs or their representatives can try to confirm with the relevant government agencies any registered properties that the decedent may have. However, there may also be hurdles on this point as more and more government agencies begin to implement rules that limit information disclosure.

Given these challenges for non-resident Filipinos, there may be a need to first evaluate how the authorities can help them maximize the benefits of the amnesty. For example, it may be useful to determine whether it is feasible to authorize Philippine embassies or consulates to accept ETAR filings and amnesty tax payments. Another potential option would be to develop online platforms to enable these individuals to file the ETAR online and settle through bank-to-bank payments. These potential options will certainly help ease the compliance of non-resident Filipinos who may be keen on settling outstanding estate tax obligations.

The intent of the estate tax amnesty is certainly laudable as it seeks to increase the revenue of the government, while helping unlock idle properties and opening these up for transfers upon the payment of the estate tax obligation. These objectives can better be realized if additional measures can be developed to help Filipinos, wherever they may be in the world, conveniently and efficiently take part in the estate amnesty program within the given period of time.

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 author and do not necessarily represent the views of SGV & Co.

 

Betheena Dizon is a Tax Senior Manager of SGV & Co.

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