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Regional Updates (12/17/20)

Mactan airport chief suspended

MACTAN-CEBU International Airport Authority (MCIAA) General Manager Steve Y. Dicdican has been ordered suspended for six months for allegedly violating the Anti-Dummy Law.

Ombudsman Samuel R. Martires barred him from entering his office during his suspension to preserve evidence according to a copy of the order.

Mr. Dicdican was accused of letting foreign officials of GMR Megawide Cebu Airport Corp. (GMCAC) manage the airport. It is a consortium of Filipino company Megawide Construction Corp. and GMR Infrastructure Limited.

The National Bureau of Investigation (NBI) on Dec. 4 said it had filed a complaint before the Justice department against Mr. Dicdican, other airport executives, and GMCAC officials for violating the same law.

In 2014, the Transportation department and the airport authority awarded the airport’s management to GMCAC under a 25-year concession for P14.4 billion for the airport’s expansion.

The complainants said GMCAC’s actions went beyond the terms of the concession and the MCIA was operated and managed by foreigners.

MCIAA workers were set to release a manifesto of support for Mr. Dicdican, spokesperson Mary Ann Dimabayao said by telephone.

Mr. Dicdican had questioned the hasty filing of the complaint, saying the concession deal was awarded years before he joined the airport authority. — Kyle Aristophere T. Atienza

Anti-logging teams formed

THE ENVIRONMENT department has ordered one of its officials to set up four teams to boost monitoring of illegal logging operations in Cagayan Valley, Bicol and the Upper Marikina river basin, it said on Thursday.

This comes after lawmakers blamed illegal logging operations for recent floods that submerged many parts of Luzon after it was hit by a typhoon last month.

The government must go after illegal logging agents because transporters and buyers of undocumented forest products are often linked to these unlawful operations, Environment Secretary Roy A. Cimatu said in a statement.

Each team is made up of representatives from the agency, Interior and Local Government department, Defense department, Armed Forces, and Philippine National Police, the agency said. — Angelica Y. Yang

River dredging to start in January

THE GOVERNMENT will start its dredging project for Cagayan River next month, which will widen the river and prevent heavy floods.

Several areas of the region will be prioritized, Environment Secretary Roy A. Cimatu told a news briefing on Thursday. Mr. Cimatu sought the widening of the river after the Cagayan Valley region experienced heavy floods last month.

Priority areas include Aparri, Camalaniugan, Lallo, Gattaran, Sto. Niño, Alcala, Amulung, Iguig, Solana, Tuguegarao City and Enrile towns. — Gillian M. Cortez

Big-ticket project list up for revision by year’s end

COURTESY OF DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS

THE government’s flagship infrastructure project list — big-ticket priority works undertaken via the “Build, Build, Build” program — will be revised by year’s end to favor those more likely to make significant progress, based on projected construction timetables and funding availability, according to the National Economic and Development Authority (NEDA).

In a briefing Thursday, NEDA Undersecretary Jonathan L. Uy said the list of 104 infrastructure projects are under review to check for their readiness for implementation. He added that the new list might be ready before the year ends.

“We are now recalibrating the 104 infrastructure flagship projects. I hope by the end of this year we will have finalized a list, it would appear that we are now (at) about 100 projects (with) some additional ones we proposed for this particular update,” according to Mr. Uy, who also heads NEDA’s investment programming group.

“The important point is work (and) procurement (are) continuing… the disbursements are a bit late, and the extension of the 2020 budget to 2021 will ensure that all of these expenditures may be ramped up,” he added.

The government has revamped the list several times after identifying an initial 75 in mid-2019. The government has been prioritizing so-called “shovel-ready” projects as its time in office runs out, and also as a means of injecting money more rapidly into the economy to help it recover.

The overall program is estimated to cost P4.13 trillion, funded via foreign loans or aid, public-private partnerships, and budget funds.

Currently, 26 of the 104 priority projects are in the approval stages and are being reassessed for whether they can be substantially started or completed within the administration’s term, NEDA Acting Secretary Karl Kendrick T. Chua said at the briefing.

“If they will be able to go through the approval and final preparation process in the next few weeks, then they will remain. If they will not be achieving those objectives, then they may be parked, but we are also considering a number of other projects,” Mr. Chua said.

“We are constantly reviewing the list and it is likely that our further review will include some of the major flood-control projects as addition because of our recent experience (with typhoons),” he added.

Details on the specific projects dropped or included in the updated list were not provided during the briefing.

Infrastructure spending hit P508.5 billion in the 10 months to October, down 18.4% year on year, according to the Department of Budget and Management (DBM). In October, infrastructure and other capital outlays fell 30.6% to P57.1 billion.

Mr. Chua attributed the lower spending to the year-earlier base, at a time when the government was implementing a catch-up spending plan in the second half.

He said construction works are also continuing to face delays due to the disruptions caused by the late-year typhoons, as well as the dearth of transport for construction workers.

The government’s economic team early this month increased its expenditure target for infrastructure by 5% to P825 billion in 2020 from the reduced target in July. Despite the increase, this is still 16.6% lower than the original P989-billion pre-pandemic spending goal.

Capital outlays in the 10 months, which include equity injected into state-owned firms and transfers to local governments for their infrastructure projects, were down 11.8% year on year to P663.2 billion. The tally accounts for 80% of the P825-billion target for the year.

The DBM remained optimistic that the government can hit its revised target this year to help the economy recover faster from the recession. — Beatrice M. Laforga

Cap on residential rent hikes to remain in force until end of 2021

housing NHA
WWW.NHA.GOV.PH

THE cap on residential rent increases will remain in force for another year, to the end of 2021, according to the National Human Settlements Board (NHSB).

In resolution 2020-04 published Wednesday, the NHSB said a 2% cap on rent increases applies to those paying monthly rent of up to P4,999.

The maximum rent hike is set at 7% for those paying monthly rent of between P5,000 and P8,999, and 11% for those paying between P9,000 and P10,000.

The guidelines apply to residential units occupied by the same lessee. If the unit is vacated, the lessor may set the initial rent for the next lessee.

The power to cap rent increases is conferred by the Rent Control Act of 2009, or Republic Act No. 9653, and is designed to protect low-income housing tenants. The resolution also cited the “economic and financial difficulties” inflicted by the pandemic.

Student housing landlords cannot increase rent more than once each year. The regulation also cannot be applied to new residential units constructed after the approval of the resolution.

The rent control measure was extended in 2017, and was set to expire on Dec. 31, 2020.

The trade department earlier set guidelines for rent deferrals and prohibited the eviction of residential and commercial tenants unable to pay after the end of a prescribed grace period. — Jenina P. Ibañez

Investments board says food irradiation projects eligible for tax breaks

FOOD IRRADIATION has been included in the government’s list of preferred investment activities eligible for tax breaks, the Board of Investments (BoI) said.

In memorandum circular 2020-018 signed Dec. 4, the BoI said it is amending guidelines under the 2017 Investment Priorities Plan as part of an overall effort to retain and create jobs during the public health crisis.

“The board recognizes the significance of private sector investments in commercial food irradiation facilities as a support service for the country’s agriculture sector in mitigating post-harvest losses and increasing the sector’s supply value chain,” the BoI said.

Food irradiation extends the shelf life of products.

The memorandum added that food irradiation projects applying to register with the BoI must have a permit from the Science and Technology department’s Philippine Nuclear Research Institute, where applicable.

Before availing of an income tax holiday, the registered business must submit a copy of its license to operate from the institute or other relevant agencies.

The directive takes effect immediately, having been published Thursday.

Malacañang last month approved the 2020 Investment Priorities Plan, which granted tax holidays to projects that address the public health crisis. The incentive plan covers manufacturers making personal protective equipment and those creating jobs in the countryside. — Jenina P. Ibañez

Competition for work to intensify as first K to 12 batches leave school

COMPETITION for jobs will be tight in the next few years with workers displaced by the pandemic to be joined in the employment search by the first full batches of K to 12 graduates, the Department of Labor and Employment (DoLE) said.

In a briefing Thursday, Labor Assistant Secretary Dominique R. Tutay said the earliest K to 12 batches will be leaving school within the next few years, adding to the “pressure” of the job search.

She said 2021-2022 will be the “first full batch for K to 12,” following a number of transition years during which the graduating cohort was smaller than usual.

The department estimated Thursday that 3.8 million workers were displaced this year, including those who were retrenched, permanently or temporarily displaced and underemployed.

The DoLE said it expects conditions to improve with the COVID-19 vaccine rollout imminent, due to the improvement in “business confidence.”

Separately, Labor Secretary Silvestre H. Bello III said minimum wages for domestic workers need to improve, and proposed a national minimum wage of P6,000 for such workers. By law, wages are set through regional wages and productivity boards and vary by region.

“I think it is reasonable to have P6,000,” he said.

He added that the wages given to household workers are too small and insufficient for those raising families. He added wages should be uniform regardless of the area. — Gillian M. Cortez

Gov’t cash usage rate at end-November at 84%

THE cash utilization rate of government agencies, as measured by notices of cash allocation (NCA), was at 84% in November, well behind the year-earlier pace of 93%, with a month remaining in the year.

The Department of Budget and Management (DBM) added that as of the end of November, P32.63 billion worth of funds authorized under the second stimulus program, known as the Bayanihan to Recover as One Act (Bayanihan II) have not yet been released. The law was originally due to expire this weekend, but legislation is in the works to extend its validity.

The DBM estimated that government agencies used P3.123 trillion out of the P3.728 trillion worth of NCAs released to them between January and November, leaving P605 billion in unused funds so far.

An NCA is an authorization issued by the DBM to agencies informing them of the availability of funds for disbursement.

Line agencies had an 81% utilization rate at the end of November, using P2.19 trillion out of the P2.705 trillion worth of NCAs, and leaving P516 billion unused.

Pandemic spending hit P107.37 billion as of Dec. 13, the DBM said in a separate data release.

This accounted for 77% of the P140-billion budget allocated under Bayanihan II, formally known as Republic Act 11194.

Budget Assistant Secretary Rolando U. Toledo said the unreleased Bayanihan II funds revert to the treasury if no extension is legislated between now and Saturday, when the law expires.

“The DBM, together with the DBCC (Development Budget Coordination Committee), fully support the extension of the validity of Bayanihan II until June 2021 since this will provide a fiscal stimulus next year and support faster economic recovery,” Mr. Toledo said via Viber Thursday.

Bayanihan II contains relief measures of the government to help sectors hit hard by the  pandemic. The stimulus package, along with a plan to accelerate overall government spending, are part of the government’s bid to help the economy recover faster. — Beatrice M. Laforga

Developers granted 3-year extension to comply with accounting norm on borrowing costs

THE Securities and Exchange Commission (SEC) has granted property firms more time to implement an accounting standard governing the treatment of borrowing costs, citing the need to provide relief to the industry during the financial crisis.

In a memorandum circular on its website, the SEC said the extension applies to accounting treatments raised by the Philippine Interpretation Committee and the International Financial Reporting Standards Interpretations Committee concerning Over Time Transfer of Constructed Goods.

The accounting treatment of Over Time Transfer of Constructed Goods is governed by International Accounting Standard (IAS) 23 – Borrowing Costs. IAS 23 lays down how to account for borrowing costs directly incurred in building “qualifying assets” — those that take a substantial amount of time to build.

The original compliance deadline was Jan. 1, 2021, but has been moved back three years.

“The SEC believes that the deferral will give more than enough time to (the) real estate industry to further evaluate and explore options to resolve the above remaining implementing issues and help the industry to mitigate the impact of COVID-19 crisis,” the SEC said in its memorandum circular.

Property companies typically borrow to complete a development, and borrowing costs can either be expensed — going directly as a cost immediately recognized in the profit-and-loss statement — or capitalized.

The industry sent two letters to the SEC — the first in September brought up implementation issues, while a second in December sought an extension. — Angelica Y. Yang

Monitoring of pandemic spending, borrowing urged to verify aid to poor

GOVERNMENT SPENDING and loans obtained for the pandemic response need to be monitored for their actual impact on the vulnerable segments of society, according to non-government organization Social Watch Philippines.

“[A] point to ponder in thinking about whether the government should be borrowing more for COVID financing is that the National Government is underspending from January to September this year,” Alvic Padilla, the project lead of the group’s Citizens’ Monitoring of Financing for COVID-19 (coronavirus disease 2019) Response and Recovery, said in an online briefing Thursday.

The Bureau of the Treasury reported that government spending in the nine months rose 16.14% to P2.71 trillion from P376.5 billion a year earlier. However, spending levels missed the revised target by 7.86%.

Gross borrowing hit P3.224 trillion in the 10 months to October, more than triple the year-earlier P967.56 billion. The 10-month total has also exceeded the P3-trillion full-year target.

External debt during the period rose 95.6% to P574.435 billion — including program loans worth P364.64 billion and P23.73 billion worth of project loans.

The Department of Finance reported that foreign loans for the pandemic response hit $13.364 billion as of mid-December.

“While borrowings are not necessarily detrimental, and may even be necessary in some situations, prudent debt management is important to ensure that people most affected by the pandemic will not bear the burden of servicing these debts,” according to Social Watch.

“Transparency and accountability on COVID-19 loans are crucial because any misuse, abuse, or wastage will have dire human and social consequences,” it said. — Luz Wendy T. Noble

AMLC turns over P18.352 million from forfeited property sale

THE Anti-Money Laundering Council (AMLC) turned over P18.352 million worth of proceeds from the sale of a forfeited property in Laguna to the US government, in compliance with the Mutual Legal Assistance Treaty.

“The process is necessary as the AMLC has no authority to forfeit for itself laundered funds and other assets. In fact, the AMLC previously turned over the proceeds of the sale to the Bureau of the Treasury, until the AMLC’s turnover of said proceeds to the US Embassy,” it said in a statement Thursday.

The property is a house and lot in Calamba, Laguna. A sole bidder made an offer and had made full payment by July.

AMLC said the turnover, which was done virtually on Nov. 24, represents the outcome of a confiscation case involving dirty money.

“This allows the AMLC to ensure that during the pendency of cases, and after their forfeiture, the assets do not diminish in value, and that these assets are converted into cash before transmittal to the National Treasury or, in this case, the requesting State,” the AMLC said.

In mid-September, AMLC Executive Director Mel Georgie B. Racela said the council froze assets worth P647 million, exceeding the P138 million total booked in 2019. — Luz Wendy T. Noble

Palay farmgate price rises 1.3% in late Nov.

THE average farmgate price of palay, or unmilled rice, rose 1.3% week on week to P15.84 per kilogram in the last week of November, with the price up 0.6% year on year, according to the Philippine Statistics Authority (PSA).

In its weekly update on palay, rice, and corn prices, the PSA said the average wholesale price and retail price of well-milled rice were unchanged at P37.64 and P41.29, respectively.

The average wholesale price of regular-milled rice rose 0.3% to P33.62 while the retail price rose 0.1% to P36.43.

The farmgate price of yellow corn grain rose 0.3% week on week to P11.98.

The average wholesale price of yellow corn grain fell 0.3% to P19.54 while the retail price fell 0.3% to P24.47.

The farmgate price of white corn grain rose 0.4% week on week to P13.08.

The average wholesale price of white corn grain rose 0.5% to P16.28 while the retail price rose 0.5% to P25.24. — Revin Mikhael D. Ochave

BoC files 70 smuggling cases, shuts down 19 warehouses

THE Bureau of Customs (BoC) filed 70 criminal cases against 244 alleged smugglers and ordered the closure of 19 customs-bonded warehouses in the year to date, the Department of Finance (DoF) said in a statement Thursday.

Citing a report from the BoC, the DoF said 151 warehouses were inspected between January and Dec. 4.

Anti-smuggling operations yielded P9.52 billion worth of confiscated goods found to have been illegally imported.

Around 53% of the total were tobacco products, according to Deputy Customs Commissioner Vener S. Baquiran.

Meanwhile, other seized products included P1.85 billion worth of illegal drugs, P1 billion of fake goods, and P414 million of smuggled general merchandise.

Other smuggled items confiscated by the BoC included automobile accessories (P354.53 million); agricultural products (P238.49 million); food (P200 million); personal protective equipment, medical supplies and cosmetics (P195.57 million); jewelry and other products (P68.89 million); used clothes (P48.09 million); smuggled cash in various currencies (P33 million); electronics goods (P31.07 million); chemicals (P5 million); steel products (P4.76 million); alcoholic beverages (P2.43 million); and firearms (P300,000).

The BoC collected P44.69 billion in November, exceeding the revised P42.221-billion goal by 5.85%, but 12% below than the year-ago level.

In the 11 months to November, the bureau collected P493.324 billion, or 97.47% of its revised full-year target of P506.15 billion. Before the pandemic, Customs was tasked with collecting P730 billion this year. — Beatrice M. Laforga

Against the Cult of Cheer

The advent of a new year and the end of the old should be an occasion for assessing what has gone before as well as for looking into what could happen in the next. But the second task is more difficult than the first for being the opportunity for the usual cheer mongers to once more predict that despite its foundations in yesterday, tomorrow will inevitably be better for everyone.

The year 2020 has been unprecedented in the horrors it inflicted on this already prostrate country and its people. It practically began with a disaster — the eruption of Taal Volcano on the 12th of January after 42 years of dormancy. It led to the lockdown of several Batangas towns. The ash reached Manila and adjacent provinces. Its effects continued to be felt until Jan. 24, among them losses in crops, livestock, and, with the destruction of fish pens, in tilapia and milkfish estimated at over P500 million. But far more distressing was the death of and injuries to dozens of people.

The Taal eruption temporarily diverted Filipino attention from disturbing news in early January of an unusual, “pneumonia-like” disease in Wuhan, China that some epidemiologists were saying could spread to other countries. Within a few weeks the Philippines recorded its first cases among Chinese nationals who were visiting the country, after the World Health Organization (WHO) had confirmed the existence of a new strain of coronavirus. It was followed by the WHO’s declaration of a global pandemic of COVID-19, the disease caused by the virus whose origins had been traced to the wildlife meat and seafood markets of Wuhan.

From an initial handful, the number of Philippine cases began to mount into the hundreds as February ended, prompting lockdowns in March of the most affected communities, among them the National Capital Region.

The lockdowns cost millions of workers their jobs and forced the economy into a recession. But as in other countries under strongman rule, the pandemic became the excuse for the government to expand its powers by militarizing what passed for its response to it.

In the months after March, not only the health and well-being of millions were increasingly endangered as the number of infections multiplied to eventually reach, in December, nearly 450,000, and counting.

Human rights became a major casualty of the contagion, as police and military empowerment led to arrests and the dispersal of demonstrations demanding government assistance; the drivers of “traditional” jeepneys — some of whom were forced to beg in the streets for food and other forms of help government was not too eagerly providing — were prevented from plying their accustomed routes and were arrested when they protested; and the harassments, arbitrary arrests, and killings of human rights defenders, independent journalists, farmer and Lumad leaders and activists surged.

Despite the national health emergency, Congress denied in May the ABS-CBN network’s application for the renewal of its franchise while approving posthaste the applications of “friendly” networks. The harassment of the online news site Rappler continued, with the cases against it and its Executive Editor Maria Ressa prospering in the courts.

The trolls and print and broadcast media hacks of the regime, together with the State media system, predictably extolled those assaults on press and media freedom, while either defending or totally ignoring in their issuances any mention of those agencies of government whose officials had been accused of corruption and other wrongdoing.

Those agencies included the Bureau of Immigration, where a so-called “pastillas” scheme (pastillas are sweets that are among Filipinos’ preferred take-home gifts from their travels) allowed visitors from China who were willing to cough up P10,000 in bribes entry into the country; the PhilHealth insurance system, in which an overpayment conspiracy with favored hospitals cost the taxpayers billions; the Department of Public Works and Highways (DPWH), in which, said the government’s own Presidential Anti-Corruption Commission (PACC), only 50% of the budgets allotted for the construction of infrastructure projects are actually spent for them while the rest go into the pockets of DPWH officials; and, of course, the Department of Environment and Natural Resources (DENR), which squandered P389 million on the “white sand” beautification of Manila Bay, and damaged the environment in Cebu where the crushed dolomite rocks that were soon gone with the first high tide had been sourced.

Meanwhile the pandemic raged, the capacity of the health system was severely strained, and thousands died. Despite the life and death need to contain the contagion, the regime practice of labeling this or that organization or individual a front, a terrorist and/or a member of the New People’s Army (NPA) reached the heights of absurdity in late October when it “red-tagged” celebrities, to whose defense responsible journalists, actors, singers and others in the communication and entertainment fields quickly rallied.

It stopped momentarily only when four devastating typhoons smashed into the country in early November, but immediately resumed even while many communities remained under flood waters, millions had lost homes and livelihoods, and as the floods aggravated the flaws of the distance learning system that had been hurriedly put in place and haphazardly implemented despite the inadequacies of the country’s WiFi connectivity, the unpreparedness of parents and students, and the computers and Internet accounts that poor families could not afford to pay for. At the same time, the arrest and harassment of government critics and of political and social activists continued, with, at one point, President Duterte threatening to defund and shut down the University of the Philippines (UP) for “doing nothing except recruit communists.”

As the year winds down, what has become obvious is that it is not so much volcanic eruptions, earthquakes, floods, or even the pandemic that are the major sources of the Filipino affliction. It is the uncaring bureaucrats the voters put in office who cannot abandon their ideological biases, their obsession with pelf and power, and their misplaced priorities to pay some attention to the plight of their long-suffering constituencies.

But most Filipinos — and the year-end surveys are likely to confirm it — will nevertheless tell the polling firms and anyone else who cares to ask that they will face the coming year with hope and even the certainty that their lives will somehow be better than what they had been in 2020. They said the same thing in 2019, in 2018, in 2017, in 2016, etc., and they will be saying that again when 2021 ends even if the year turns out to be another disaster.

Conventional wisdom has always looked at Filipino optimism as a good thing, but is it? By preventing many from taking a long hard look at the social and national predicament rooted in the poverty, bad governance, and worse leaders that it has been their misfortune to have, it prevents things from improving, and contributes to their being worse. It is precisely the kind of “positive thinking” that, because it helps prevent change — if the future will be better, why do anything? — the ruling oligarchy approves of and encourages.

What has been happening in this part of the planet over the last seven decades since 1946 should be enough of an indication that the cult of cheer that survives every disaster and resurfaces every year-end serves only the powerful, and least of all those who subscribe to it. But that is a lesson that will take generations to learn, like the many others in the sorry history of this country of willful optimists. 

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

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