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Record-high reserves to boost peso, liquidity

THE RECORD-HIGH level of dollar reserves held by the central bank will bode well for the local unit’s strength versus the dollar and for liquidity, according to economists.

The Bangko Sentral ng Pilipinas (BSP) on Friday released preliminary data which showed that gross international reserves (GIR) amounted to $86.393 billion as of end-November, up by 0.65% from the $85.834-billion level in end-October and also an increase by 14.15% from the $75.682 billion seen a year ago.

This marked the third straight month of continued increase in the GIR level.

“Sustained recovery in BSP’s foreign reserves probably resulted from intervention by the monetary authorities in the spot market to avoid an overshoot of the P50 level. This helped bolster overall liquidity further while avoiding the side effects of rapid peso strengthening,” Bank of the Philippines Islands Lead Economist Emilio S. Neri said in a text message to BusinessWorld.

This was echoed by Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Record-high GIR fundamentally provides greater buffer/support for the peso exchange rate versus the US dollar,” he said in a text message.

“Higher GIR recently brought about by continued growth in OFW (Overseas Filipino remittances), BPO (business process outsourcing) revenues, foreign tourism receipts, POGO (Philippine Offshore Gaming Operator) revenues, as well as continued inflows of foreign investments into the country.

Latest data from the BSP also showed that gold reserves in the central bank, which are also included in the country’s foreign exchange buffer, was seen at $8.015 billion, unchanged for the sixth consecutive month since May. However, it stretched by 3.08% from its end-November 2018 level of $7.776 billion.

BSP data showed gains from the central bank’s investments abroad, which make up the bulk of the reserves, dipped to P73.466 billion from end-October’s $73.689 billion but still bigger compared to the $61.317 billion a year ago.

Meanwhile, foreign currency deposits grew to $3.169 billion from $2.385 billion in the succeeding month. It was also lower than the $4.932-billion level traced in end-November 2018.

Net international reserves, which refer to the difference between the BSP’s GIR and total short-term liabilities, rose by $560 million to $86.38 billion as of end-November from the end-October level of $85.82 billion.

Remittances are expected to rise in the holiday season. Latest BSP data showed that cash remittances jumped to $2.379 billion in September, an increase of 6.24% from the $2.237 billion in the same month a year ago.

Meanwhile, data from the Bureau of Internal Revenue showed the government collected $1.6 billion worth of withholding taxes from workers of POGOs and service providers from January to August. — L.W.T. Noble

2019’s notable rides

THERE WAS A PRETTY GOOD mix of vehicles introduced in the country this year. There are some that exude sophisticated styling with superb exterior, spectacular cabin quality, and excellent ride comfort. There are also newly arrived autos that are more likely performance-oriented, delivering strong performance numbers, great turbocharged engines, and sharp handling, among others. Some of the vehicles, otherwise, are a combination of these impressive qualities.

Despite some uncertainties in the local automotive market this year, one thing is for sure, there is a handful of worthwhile automotive arrivals in the country to choose from. Here, in alphabetical order, are some of them:

FORD EVEREST
Last August, Ford Philippines launched a new and refreshed version of its popular mid-sized sport utility vehicle (SUV) Everest, coming up with improved capability, safety, and efficiency, as well as notable enhancements to its engine, transmission, and driver-assist technologies.

This Ford Everest is powered by the new-generation 2.0L Bi-Turbo diesel engine that delivers 213PS and 500 Nm of torque, and 2.0L Turbo diesel engine that delivers 180PS and 420 Nm of torque. It offers better fuel efficiency and acceleration with the advanced 10-speed automatic transmission.

Engineered with the driver and passengers in mind, the new Everest offers smarter and safer features. Among others, it has a smart keyless entry and push-start button that gives users quicker engine starts, improved convenience and ease of entry and exit from the vehicle; a hands-free liftgate feature that automatically opens and closes the liftgate; and an Active Park Assist feature that helps drivers find parallel parking spaces and steers the vehicle to a parking slot, with the driver’s hands off the steering wheel.

HONDA ACCORD
The all-new 10th Generation Honda Accord was also unveiled in the local market this year. This Honda’s luxury sedan offers a premium and bolder design, a more powerful engine, and the advanced Honda SENSING safety technology.

Powering the Honda Accord is a new 1.5L VTEC Turbo engine developed under Earth Dreams Technology. This new engine puts out a maximum power output of 190PS at 5,500 rpm and 243 Nm of torque from 1,500 — 5,500 rpm. Its power is transmitted through a Continuously Variable Transmission (CVT) developed based on Honda’s Earth Dreams Technology. Combining these features under the hood of Honda Accord results in responsive performance, acceleration and efficient fuel economy.

The new Honda Accord now also sports a new eight-inch display audio system, which is one of the most advanced systems offered by Honda to date. Aside from a simplified menu structure and customizable shortcuts for commonly used features and applications, this intuitive and easy-to-use system also comes with navigation and supports Apple CarPlay and Android Auto for a more intuitive smartphone connectivity.

HYUNDAI PALISADE
Competing with the likes of the Ford Explorer, Mazda CX-9, and GAC GS8, Hyundai Palisade is a strikingly styled premium SUV recognized for its refined visual design breakthroughs, state-of-the-art technology and safety features.

A quiet ride, powerful driving performance, and excellent fuel efficiency are guaranteed with Palisade’s R2.2 diesel engine and Atkinson-cycle 3.8L gasoline engine. The eight-speed automatic transmission also delivers a smooth and seamless driving experience, according to its website.

The Hyundai Palisade is engineered with a nine airbag system and active safety system equipped with intelligent driving safety technology. It also comes with advanced features from the backseat conversation and sleep functions to the rearview monitor and active noise-cancelling function. Moreover, it is equipped with blind view monitor, USB ports for second- and third-row passengers, and three-zone independent-control fully automatic air conditioning.

KIA STINGER
Kia Philippines also debuted this year one of its most powerful offerings — the all-new Stinger. This visionary product of the Kia GT Concept showcases a perfect balance of ride, handling, comfort, and impressive powertrain.

The all-new Stinger is powered by a 3.3L V6 Twin Turbocharged Gasoline Engine Direct Injection Dual CVVT. Its maximum power output is 370PS at 6,000 rpm, while its maximum torque is 510 Nm at 1,300-4,500 rpm. Acceleration from 0-100 kilometers per hour (kph) is at 4.9 seconds with a top speed of 270 kph. It is available in RWD drivetrain and mated to an eight-speed automatic transmission.

The Kia Stinger doesn’t fall short on advanced technology features. It has electronically controlled Dynamic Suspension integrated with Drive Mode Select, which adjusts steering boost, shift points, throttle and suspension mapping. Braking is powered by 4-Piston Brembo Caliper Discs on the Front and Rear. Moreover, Dynamic Torque Vectoring system comes standard.

MITSUBISHI STRADA
As early as January, Mitsubishi Motors Philippines Corp. (MMPC) introduced in the country the heavily revised version of the Strada, which is considered as a key model of Mitsubishi Motors in the competitive pickup truck market. It is designed not only to be more durable, reliable and capable, but also to deliver a more comfortable ride.

The new Strada is refined to deliver an unmatched performance with its 2.4L 4 In-line 16 Valve DOHC Clean Diesel with Variable Geometry Turbo and MIVEC (Mitsubishi Innovative Valve timing Electronic Control System) 4N15 that gives a maximum output of 181PS at 3,500 rpm and a maximum torque of 430 Nm at 2,500 rpm.

As far as safety is concern, the new Strada hosts an array of passive and advanced active safety features. It carries the proprietary Mitsubishi Motors’ RISE body (Reinforced Impact Safety Evolution) that absorbs the impact of collision, and retains the current model high durability, high reliability ladder-type frame, and high-impact safety cabin structure. The Active Stability Traction Control (ASTC), Hill Start Assist (HSA) and Trailer Stability Assist (TSA) are now standard in all variants.

TOYOTA GR SUPRA
Toyota Motor Philippines (TMP) Corp. also marked another history in the local automotive scene as it brought the all-new Toyota GR Supra in the Philippine shores. This first-ever Toyota Supra to be retailed in the country is the modern evolution of its predecessors. It inherits key styling features from both the Supra A80 and the Toyota 2000 GT.

The local variant of the Toyota GR Supra is powered by a twin-scroll turbocharged, in-line six-cylinder engine that produces a maximum output of 335 hp and 500 Nm of torque. It comes exclusively in 3.0L displacement and eight-speed automatic transmission.

The chassis and body frame of the all-new Toyota GR Supra are masterfully crafted to enjoy a 50:50 front-rear weight distribution, which is crucial in achieving optimum cornering performance. Its front wheels are equipped with double-joint type MacPherson Strut, while its rear wheels come with Multi-Link suspension. It also features a limited slip differential and ventilated disc brakes. — Mark Louis F. Ferrolino

China aims for southeast to be 70% self-sufficient in pork

BEIJING (Reuters) — China’s Ministry of Agriculture and Rural Affairs issued a three-year plan to speed recovery of pig production after the world’s largest hog herd was ravaged by disease, targeting 70% self-sufficiency in pork for the nation’s southeast.

Beijing said its hog herd was down 41% in October from a year earlier, after an epidemic of African swine fever killed millions and stopped many farmers from replenishing herds.

Analysts and industry insiders believe the damage may be worse, with some estimating the herd has dropped by 60% or more.

With consumer inflation close to an eight-year high and the country’s peak consumption period during the Lunar New Year holiday in late January just weeks away, Beijing has repeatedly said its pig stocks will soon recover.

The plan, dated Dec. 4, reiterated a target for pig stocks to stop falling and start picking up by the end of this year, and for production to recover to close to normal levels by the end of 2020.

China issued a series of policies in September aimed at supporting the recovery of hog production, and the plan includes many of those.

It also said the previously announced subsidies for large-scale farms must be issued on time and land permits simplified.

Stronger financial support and insurance must be given to pig breeders, and help for small and medium-sized farmers to resume production, the plan said.

The plan outlines as well a goal to improve the prevention and control of African swine fever and to regulate reporting of outbreaks.

“Once suspected outbreaks are found in various places, they must be standardized and reported as soon as possible,” it said.

The plan also clarifies a regional layout, with the northeast, northern and central south regions, including Hunan, Hubei and Guangxi provinces, to remain major pig production areas that will supply other parts of the country.

The populous southeast coastal provinces of Jiangsu, Zhejiang, Guangdong and Fujian as well as the cities of Tianjin, Beijing and Shanghai must also achieve a self-sufficiency rate of around 70% for pork.

Southwest and northwest regions including Sichuan should achieve basic self-sufficiency. — Reuters

Fed, BSP meetings seen affecting trade this week

By Denise A. Valdez
Reporter

PHILIPPINE STOCKS are seen to move this week in accordance with market sentiment on the central bank’s policy meeting and any tariff adjustments by the United States on Chinese products — two events scheduled in the coming week.

The 30-member Philippine Stock Exchange index (PSEi) climbed 10.81 points or 0.13% on Friday to close this month’s first week of trading at 7,801.72.

On a weekly basis, the main index was up 0.81% to record its first week of gain after three weeks of decline.

Value turnover last week averaged P5.932 billion to trim 34% from a week ago. Activity from foreign investors saw a turnaround with net buying at P89 million from a net selling of P1.6 billion in the prior week.

Online brokerage 2TradeAsia.com said much of the local bourse’s performance last week was driven by volatile mood that swept most markets across the region.

Heading into a new week, it said the Sino-US trade talks, monetary policy and water concessionaires’ battle with government will be the main drivers of the stock market.

“Emotions are bound for a rough patch in the coming days, as 15 December’s US tariff implementation deadline on Chinese imports loom,” 2TradeAsia.com said in a market note sent Friday.

It noted there are polarizing opinions from investors on whether the trade talks would be enough to trigger tariff rollbacks or if the political climate will cloud expectations of a tariff resolution.

“For now, remarks that would be given along these lines would cause share prices to fluctuate, unless both major parties come to amicable terms,” it said.

2TradeAsia.com likewise said the meeting of the US Federal Open Market Committee on Dec. 10-11 will impact global equities, on top of the policy review of the Bangko Sentral ng Pilipinas on Dec. 12.

Also to be watched is market sentiment on infrastructure projects that are of similar nature as that of water concessionaires, which drew the ire of President Rodrigo R. Duterte last week.

“Sequels to water concessionaires’ concerns may cast some cloud on the fate of other similar infra projects, especially within capital-intensive utilities… Learn to look at temporary set backs as opportunity to move into stocks with fundamentals that have run the test of time,” 2TradeAsia.com said.

Aside from upcoming events, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the local bourse may start this week’s trading with a gain on the back of positive sentiment spilling over from the US jobs report that came out Friday saying jobs increased 266,000 in November.

Mr. Limlingan is putting the PSEi’s support level at 7,760 and resistance at 7,920.

For 2TradeAsia.com, the PSEi’s immediate support is seen between 7,500-7,700, while resistance is between 7,850-7,950.

Style (12/09/19)

BPI Sinag ng Pasko Christmas Bazaar

TIME to go Christmas gift shopping at the BPI Sinag ng Pasko bazaar on Dec. 11 at the Palm Drive Activity Center, Glorietta 2. Featuring 40 Filipino social enterprise merchants, the one-day Christmas sale curates local pieces that are uniquely handcrafted by native communities around the Philippines. Held the day before the year’s last online sales events, BPI Sinag ng Pasko features a combination of innovative and indigenous products, upcycled and sustainably sourced creations, and comforting and surprising items. Each item offers an opportunity to not just spread Christmas cheer to those close to you, but also spark joy to Filipino communities. Buying a Yakan weave can help secure the preservation of indigenous culture. Paying for local delicacies can mean paying for a farmer and his family’s food. Purchasing a notebook can mean a boost of confidence for a single mom lifting her family out of poverty. There are arts and crafts items, clothing, jewelry, food, home items, novelty items, things for children, and a whole lot more. Learn more about the programs of the BPI Foundation by following its Facebook page (www.facebook.com/BPIFoundation) or visit the official website (www.bpifoundation.org/).

Watches at The Big Red Sale at Secondo

Why pay full price for a luxury watch when you can buy one pre-loved and save money? Here are six items that may be of interest at Secondo’s ongoing Big Red Sale. First is the Rolex’s biggest classic, the Submariner (116619) also known as the Smurf. Introduced in 2008, it was one of three all-gold Submariner models to debut that year. This original Rolex divers watch is the most coveted collector’s item among professional divers and collectors alike. Second is Patek Philippe’s (5960) Flyback Chronograph with Annual Calendar. A rare classic, it combines a self-winding flyback chronograph with an annual calendar in a 40.5 mm steel case. Third is Seiko’s Superior Limited edition (SSA113K1). This timepiece only needs to be set at the right time and shaken to charge. It will give the most accurate time with a power reserve of up to 55 hours. Fourth is Omega’s Speedmaster Michael Schumacher Limited Edition (3519.50.00). Omega has honored the Formula 1 world champion with limited edition pieces, starting in 1996. This timepiece is powered by the calibre OMEGA 1152 which is a self‑winding chronograph with a rhodium‑plated finish that offers a power reserve of 44 hours. Fifth is an IWC’s Portugieser Yacht Club Chronograph (390503) has a silver-plated dial, black rubber strap, and stainless steel case and folding clasp. and last is the A. Lange & Söhne Richard Lange Boutique Edition (232.026). This particular edition has stunning movement with no complications and a second running hand that’s central. The inner workings and quality of all timepieces have been evaluated, certified and checked by the respective Official Service Centers and/or Authorized Dealers. The authenticity and provenance have likewise been verified. The Big Red Sale at Secondo runs until Dec. 20 at the 3/F Glorietta 4, Ayala Center Mall, Makati. For details call 0915-490-8204 or 8851-6583.

UNIQLO Christmas specials

UNIQLO treats its shoppers with weekly limited offers this holiday season. All the way until Dec. 22, customers can enjoy special promotions on LifeWear pieces. The collection offers a wide range of items, from essentials to collaborations with pop culture phenomena and luxury fashion labels to express one’s individuality. To celebrate the season of gift giving, shoppers can take advantage of seasonal and limited offers each week, with deals on items such as tops, bottoms, outerwear for men, women, and children. Shoppers can also purchase gift cards from any UNIQLO store. They are available in P500, P1000, and P2000 denominations, and come in a sleeve, message card, and special paper bag. For more updates, customers may download the UNIQLO mobile app, visit UNIQLO Philippines’ website at www.uniqlo.com/ph and follow social media account, Facebook (facebook.com/uniqlo.ph), Twitter (twitter.com/uniqloph) and Instagram (Instagram.com/uniqlophofficial).

How PSEi member stocks performed — December 6, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, December 6, 2019.

 

BoC asserts right to acquire cargo undervalued by 30% or more

THE Bureau of Customs (BoC) has issued an order asserting its authority to acquire imported goods whose value is underdeclared by at least 30%.

According to Customs Administrative Order (CAO) No. 16-2019, the Commissioner will have the “sole authority” to resort to compulsory acquisition if the shippers declare an “unconscionably low” value for Customs purposes.

“A commodity is valued unconscionably low when the Bureau, after applying all the methods of valuation, still finds a discrepancy of at least 30% in the value declared as against other references,” according to the order.

Under current law, the state has the right of compulsory acquisition through the Customs Commissioner to “acquire imported goods under question for a price equal to their declared customs value plus any duties… on the goods.”

The measure is meant to protect government revenue against undervaluation of goods, it said.

A notice of compulsory acquisition (NCA) which serves as the preliminary order, will be issued upon identifying that the goods are undervalued to the specified extent.

This will be followed by a warrant of compulsory acquisition (WCA), informing the importer that the commissioner is set to acquire the goods in cash for the declared customs value plus paid duties, within 10 days of the WCA issuance.

The acquired goods may be disposed of through a public auction, negotiated sale or other methods allowed by law.

The importer has a 20-day period to appeal the decision to the Secretary of Finance and will be given another 30 days to appeal to the Court of Tax Appeals.

The CAO, dated Nov. 5, was published on the bureau’s website over the weekend and will take effect 30 days upon its publication in a national newspaper.

The CAO serves as the implementing rules and regulations (IRR) of section 709 of Republic Act No. 10863 or the Customs Modernization Tariff Act (CMTA), which was signed in May 2016. — Beatrice M. Laforga

Nickel ore output seen at 40-50 million MT in 2020

THE Philippine nickel industry expects expanded production next year to fill the gap left by Indonesia’s nickel ore export ban to between 40 and 50 million wet metric tons (WMT) of ore, possibly accompanied by higher prices due to supply concerns.

“It’s more than 40 million tons, but let’s say, whether it exceeds 50 million tons, I doubt,” Philippine Nickel Industry Association (PNIA) President Dante R. Bravo told reporters on the sidelines of the group’s year-end report news conference in Quezon City.

“That would depend basically on the prices, particularly for the lower grades because that is where the added volume would be coming from. I think, for medium and higher grades we have limited volume on these,” he added.

According to the Mines and Geosciences Bureau (MGB), production of nickel ore in the first half was 11.306 million dry metric tons (DMT) or about 17.395 million wet metric tons (WMT), valued at P12.24 billion.

For 2019, Mr. Bravo said that production could hit about 39 million WMT, equivalent to 25 million to 26 million DMT.

Indonesia has banned the export of nickel starting 2020, in a bid to develop a domestic processing industry that would capture more value-added from the nickel trade. The ban was announced on Sept. 2, bringing forward an earlier announced ban that was scheduled for 2022.

“Because of the Indonesian export ban, we expect that there will be ramp-up of production for ore exports,” Mr. Bravo said.

“Likely, there is going to be an increase in the price of ore because there is a shortage of ore,” Mr. Bravo said.

“When the price is a bit high… if you can make money, you can go a longer way to mine and that could increase the volume,” he said.

Mr. Bravo noted that the US-China trade war may still pose a great challenge for the industry.

“It makes everybody uncertain in terms of foreign exchange, in terms of economic growth, in terms of foreign direct investment,” he said. — Vincent Mariel P. Galang

PPA completes upgrade of Davao del Sur seaport

DAVAO CITY — The P550-million Malalag Port Development Project in Davao del Sur has been completed, upgrading the cargo facility for the south of the Davao Region, the Philippine Ports Authority (PPA) said over the weekend.

In a statement, PPA said among the goods that are expected to pass through the seaport are “molasses, sugar, steel products, vehicles and heavy equipment.”

Davao del Sur is considered the center of sugar production in the region, and also produces coconut, rice, mango, and banana, among other agricultural commodities.

The port is located about 25 kilometers from Digos City, the capital of Davao del Sur, and 88 kilometers from Davao City.

Davao City Chamber of Commerce and Industry, Inc. President Arturo M. Milan said the modernized facility will help develop not just the region but also neighboring provinces.

“It will be easier for them (local producers and traders) to move their goods,” Mr. Milan told BusinessWorld.

In June 2017, the Malalag municipal government returned the operations of the port to the PPA.

The facility was handed over to Malalag following the passage of the Local Government Code in 2001, which specified the devolution of some national functions.

The upgrades include the construction of a new wharf, access trestle, back-up area, improvement of the old back-up area, and the installation of a lighting system.

Aside from Malalag, the PPA operates three other ports in the region: Sasa and Sta. Ana in Davao City, and one in Mati City, Davao Oriental. — Carmelito Q. Francisco

Japan loan worth P2 billion expected soon for bridge upgrades

A P2-billion loan from Japan is set to be signed “in the coming months” to fund earthquake resilience improvements for key bridges in Metro Manila, the Department of Finance said.

In a statement Saturday, Finance Secretary Carlos G. Dominguez III told Hiroto Izumi, head of a Japanese delegation at a meeting held near Tokyo, that the Philippines and Japan are “ready to sign the 4.409 billion yen supplemental loan agreement for the Metro Manila Priority Seismic Bridge Improvement Project in the coming months.”

The Japan International Cooperation Agency (JICA) has said that the project will enhance the seismic resilience of Lambingan and Guadalupe bridges in Metro Manila, which are expected to be completed by 2022.

Lambingan bridges the Pasig River between Manila and Mandaluyong while Guadalupe is the Pasig river crossing along EDSA, Metro Manila’s most heavily-trafficked circumferential road.

During the ninth high-level meeting of the Philippines-Japan Joint Committee on Infrastructure Development and Economic Cooperation, the two officials signed a memorandum of cooperation (MoC) that formalizes Japan’s commitment to provide technical support in drafting a master plan for Subic Bay Freeport.

Last month, DoF said that Japan has agreed to support the proposed master plan, which will develop possible projects to boost economic activity in the Subic Bay area.

The meeting discussed the implementation of Japan-funded infrastructure projects, in which Japan committed “to extend additional technical assistance that are critical to the Philippines’ campaign to bridge the infrastructure financing gap,” on top of its existing loan agreements.

The Finance department said that the two sides will work on the exchange of notes and the loan agreement for an additional loan to fund the ongoing Davao City Bypass Construction Project (DCBCP).

The two also promised to hasten arranging the Central Mindanao Highway Project (Cagayan de Oro-Malaybalay Section) as a candidate for the Japanese official development assistance.

In addition, DoF said Japanese officials also expressed interest in conducting the pre-feasibility studies of the four priority projects — the Cebu Circumferential Road, the Second San Juanico Bridge and Access Road, the Central Mindanao Highway (Cagayan de Oro-Malaybay Section) as well as the Agusan del Norte-Butuan City Logistical Highway (also known as the fourth Butuan Bridge).

They also discussed other “loan financing arrangements for the Philippines as it transitions to an upper middle-income country status ahead of schedule in 2020.”

The Japanese officials reiterated their interest in providing loans for the Cebu-Mactan Bridge and Coastal Road Construction Project and additional technical aid to the Bangsamoro Transition Authority and the rehabilitation of the most affected areas in Marawi City. — Beatrice M. Laforga

GSIS hoping for full insurance cover for public schools

THE government pension fund said it hopes to finally reinsure public school buildings against calamities when it auctions off the reinsurance contract for the National Indemnity Insurance Fund on Wednesday.

In an interview with BusinessWorld, Government Service Insurance System (GSIS) Vice-President Leopoldo A. Casio, Jr. said that the auction could result in full coverage of school buildings and property controlled by the Department of Education (DepEd).

“This is for DepEd schools because these are uninsured at the moment. DepEd schools are uninsured because of budgetary constraints,” he said.

“The opening of bids will be on Dec. 11 and hopefully the international reinsurers will bid because this is such a large program for the government,” he added.

Mr. Casio said insurance for schools has long been an issue because the properties are worth billions. He added, “It will help in terms of liquidity on the part of DepEd and the restoration of schools will be faster, (because it eliminates the need for) asking the government for additional funding.”

Administrative Order No. 33 issued by Former President Corazon C. Aquino in 1987, requires all departments to insure their physical assets with GSIS against calamities.

“All heads of department, commissions, boards, bureaus, offices of the national and local governments concerned except municipal governments below first class, government-owned and/or controlled corporations, subsidiaries and acquired asset corporations shall secure from the General Insurance Fund directly, all insurances or bonds covering properties, contracts, rights of action and other insurable risks of their respective offices, including all those in which their respective offices have an insurable risk and all those in which they have an insurable interest only,” according to the order.

According to a 2013 Commission on Audit (CoA) report, P6.85 billion worth of public school buildings and other Dep-Ed-owned properties were uninsured despite the AO requiring them so.

The National Indemnity Insurance Fund will also be used to finance risk insurance of roads and bridges built by the Department of Public Works and Highways (DPWH). — Gillian M. Cortez

CTA denies Duty Free appeal of tax refund ruling

THE Court of Tax Appeals (CTA) denied for lack of merit the appeal of Duty Free Philippines Corp. of an earlier ruling dismissing its P142.9-million tax refund claim.

In a three-page resolution dated Nov. 8, the court’s special first division reiterated that both Duty Free and the Bureau of Internal Revenue are public entities, with any disputes subject to the jurisdiction of government lawyers.

“Thus, Sections 66, 67, and 68, Chapter 14, Book IV of Executive Order (EO) No. 292, otherwise known as the Administrative Code of 1987, and the doctrinal pronouncement of the Supreme Court in the PSALM (Power Sector Assets and Liabilities Management Corp.) case interpreting the said provisions, apply,” the court ruled.

“Such being the case, the subject dispute or claim falls under the jurisdiction of the Secretary of Justice, and not of this Court,” it added.

The court on May 30 ruled that Duty Free is considered as an attached agency of the Department of Tourism under Republic Act 9593.

It also ruled that under EO 292, all disputes, claims and controversies between government agencies involving questions of law should be settled by the Secretary of Justice.

Under the EO the Office of the Solicitor General (OSG) is authorized to settle cases involving government offices to whom it acts as principal law office and cases involving both questions of law and fact. The Department of Justice will handle cases not falling under the OSG.

The court also ruled that it does not agree with the contention of Duty Free that the court can still entertain the case as it was filed before the Supreme Court promulgated the PSALM ruling.

The PSALM ruling found that under Presidential Decree No. 242, all disputes and claims solely between government agencies and offices must be settled by the Secretary of Justice, the Solicitor General or the Government Corporate Counsel depending on the issues and agencies involved.

The CTA said that the interpretation of the provisions of PD 242, which is now in EO 292, “constitutes as part thereof as of the date of its enactment, not at the date when the PSALM case was promulgated.

“Thus, at the onset of the instant case, this Court no longer has jurisdiction to entertain the same,” it said.

“Wherefore, premises considered, the instant Motion for Reconsideration is denied for lack of merit,” it added.

Duty Free filed its petition for review on March 15, 2017 over the Bureau of Internal Revenue’s alleged inaction on its claim for the refund of allegedly erroneously assessed and collected value-added tax for 2015.

The decision was written by Associate Justice Erlinda P. Uy and concurred in by Roman G. del Rosario. — Vann Marlo M. Villegas

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