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Medical frontliners to to get more benefits under 2 palace orders

PRESIDENT Rodrigo R. Duterte on Monday issued an administrative order giving a special risk allowance to health workers handling coronavirus patients.

The President ordered public and private sectors employing health workers directly catering to coronavirus disease 2019 (COVID-19) patients to pay a special risk allowance worth  as much as P5,000 a month.

Mr. Duterte also signed a separate order giving frontline medical workers an additional monthly pay of as much as P3,000 on top of their hazard pay and similar benefits. The funding under both orders will come from the P13.5 billion allotted by the Bayanihan to Recover as One Act.

Meanwhile, the Trade department has allotted P100 million in loans to help small businesses affected by Typhoon Vamco, locally named Ulysses.

The agency will distribute both the loans and a P10-million livelihood support grant to micro and small enterprises (MSEs), Trade Secretary Ramon M. Lopez told the ABS-CBN News Channel on Monday.

He said funds for pandemic-hit businesses were being extended to small companies affected by the typhoon.

Under the Bayanihan to Recover as One Act, the Small Business Corp. has P10 billion to expand its COVID-19 loan program for micro, small and medium-sized enterprises (MSMEs).

The Trade department would continue to monitor the implementation of a price freeze on basic goods and necessities in areas placed under a state of calamity, Mr. Lopez added. “We’ve been doing that for the past three weeks.”

The most recent typhoon battered parts of Luzon after first making landfall in Quezon province on Nov. 11. Before this, two other typhoons hit Southern Luzon, especially the Bicol region. — Gillian M. Cortez and JPI

Nationwide round-up (11/16/20)

Business groups call for better disaster management, better public-private coordination

BUSINESS groups on Monday made an “urgent” call to improve the country’s disaster management system in the wake of the recent major floodings across Luzon triggered by a series of typhoons. In a joint statement released by the the Management Association of the Philippines and signed by 19 organizations, the private sector groups said steps must be taken to improve the preparedness aspect as well as emergency response. “We express serious concern about the state of our country’s disaster preparedness that could have minimized the untimely deaths of our countrymen, and avoided massive damage and destruction of property,” they said, “But even as we express this concern, we urge our countrymen to move forward in a coordinated and efficient fashion to mitigate the ill-effects of the recent typhoons.” Among their recommended course of action include better public-private partnerships, especially at the local government level, and a nationwide effort to address environment and climate issues.

PROBE
Vice President Maria Leonor G. Robredo, meanwhile, urged authorities to look into the deadly flooding in Cagayan province, citing that there was “definitely an oversight” given the extent of the damage. “Were they warned enough that there was really danger of heavy floods of this magnitude? We really need an investigation because if we wouldn’t have a formal investigation, the danger that it would happen again, sooner or later, is really there,” Ms. Robredo said in an interview with ABS-CBN News Channel. The Palace, on the other hand, asserted that the government did not have any shortcomings in its preparations. “There were no shortcomings but  we will always strive to be better,” Palace Spokesperson Harry L. Roque said in a briefing on Monday. He did acknowledge that while the floods and landslides were triggered heavy rains brought by the series of recent typhoons, other factors such as “climate change, deforestation, and illegal mining” are to blame for the disaster.

EMERGENCY EMPLOYMENT
In a related development, thousands of workers in areas devastated by typhoons will be given emergency employment, according to the Department of Labor and Employment (DoLE). In a virtual briefing on Monday, Labor Assistant Secretary Dominique R. Tutay said they expect to help “between 30,000 to 40,000” workers in the disaster-hit areas. The period of employment will be for 15 days and workers will be paid based on the current daily minimum wage rate of the region they reside in. — Gillian M. Cortez and Kyle Aristophere T. Atienza 

Marikina representative pushes for another stimulus package

A LAWMAKER on Monday urged Congress to pass another stimulus package in response to the economic impact of the coronavirus crisis. “I urge this August chamber, our counterparts in the Senate, and the executive department to come together anew and enact a Bayanihan III,” Marikina 2nd District Rep. Stella Luz A. Quimbo said in her privilege speech during Monday’s session. Ms. Quimbo, an economist who previously taught at the University of the Philippines School of Economics and was a commissioner at the Philippine Competition Commission, said a P413 billion response to a P3.4 trillion economic loss “is clearly not enough,” referring to the funds provided under the first two Bayanihan laws, which cover the government’s coronavirus emergency measures. Ms. Quimbo acknowledged the government’s efforts to gradually ease restrictions to open the economy in the third quarter, but said small businesses continue to struggle. “After months without revenues, while continuing to shoulder operating costs, many businesses are cash strapped. Public transportation has also been severely lacking in urban areas, making it difficult for workers to return to work,” she said. “Hence, the third quarter economic contraction announced last week, the largest.” The Philippine Statistics Authority reported that the Philippine economy contracted by 11.5% in the third quarter, with the industry and services sectors dropping by 17.2% and 10.6%, respectively. Agriculture posted a modest growth of 1.2%. “In my computation, to attain a 5.5% contraction in 2020, our gross domestic product should increase in the fourth quarter… Moving from 5.5% contraction of gross domestic product (GDP) to a 10% contraction means losing an additional 900 billion pesos. So from an expected 2.4-trillion-peso loss, we now stand to lose P3.3 trillion,” Ms. Quimbo said. The solon said a Bayanihan III must incentivize businesses to preserve and restore jobs, provide worker subsidies to pay for coronavirus testing and sick leaves of those who contract the virus, and ensure adequate funding for vaccines. — Kyle Aristophere T. Atienza

Entry of foreign investors still limited to specific visas, BI clarifies

THE Bureau of Immigration (BI) on Monday clarified that foreign investors who are  allowed entry into the country need to hold specific visas. Only foreigners holding visas granted based on Executive Order No. 226 or the Omnibus Investments Code, and those with Special Investor’s Resident Visa (SIRV) issued based on EO 226 may enter the Philippines, Commissioner Jaime H. Morente said in a statement. “Those who will be entering the country under visa types not yet allowed by the IATF (inter-agency task force) will still be restricted,” he said.  SIRVs issued under Executive Order No. 63 in tourist-related projects and tourist establishments are still restricted, Mr. Morente said. — Vann Marlo M. Villegas

Health department issues warning on danger of carbon monoxide poisoning from generators

THE Department of Health (DoH) on Monday reminded the public not to use generators indoors to avoid carbon monoxide poisoning. The warning was made following reports of such deaths in the Bicol region, where some areas remain without power supply after infrastructure were damaged by the recent series of typhoons. Health Undersecretary Maria Rosario S. Vergeire, in a briefing, pointed out that generators emit carbon monoxide, a deadly gas that is odorless and cannot be noticed until symptoms are felt after inhaling. She said generators should be positioned at least 20 feet away from the household and not placed indoors. Typhoon Ulysses (international name: Vamco), the latest to hit the country, affected a large part of the norther island of Luzon, including Metro Manila, Bulacan, Cavite, Rizal, Laguna, and Quezon province. The National Electrification Administration reported that as of Nov. 15, power supply has been either partially or fully restored in 195 out of 476 affected cities and municipalities across several regions in Luzon. — Vann Marlo M. Villegas

VP again chides President over dirty joke at calamity briefing

THE President should focus on things that are “really urgent,” Vice President Maria Leonor G. Robredo said on Monday, after the country’s leader made a dirty joke at a calamity briefing. “When we give attention to other things, we tend to communicate the wrong things… If we’re going through something really serious, it is also very important for us to communicate how urgent a particular matter is,” said Ms. Robredo, who heads the opposition. During a briefing in Pili, Camariñes Norte, Mr. Duterte poked fun at a local official — whom he described as a “friend” — for having a lot of women. This was not the first time Mr. Duterte made a sexual innuendo behind his presidential podium. — Kyle Aristophere T. Atienza

Regional Updates (11/16/20)

Magnitude 6 earthquake shakes Surigao del Sur, surrounding areas

A MAGNITUDE 6 earthquake shook Surigao del Sur at around 6:30 a.m. Monday, with the epicenter located in San Agustin town. The tremor was initially reported at magnitude 6.4 and later adjusted by the Philippine Institute of Volcanology and Seismoloy (Phivolcs).  Intensity 5 was reported in the coastal city of Bislig and the town of Rosario in Agusan del Sur province. Cagayan de Oro City and several towns in Misamis Oriental felt intensity 4. Phivolcs said damage and aftershocks were expected. Among the first reported impacts was on the water distribution system in the coastal town of Hinatuan, where supply was temporarily cut off. Hinatuan is about 73 kilometers from the epicenter. A no-tsunami threat advisory was also issued after the earthquake.

Iloilo city resto-bars ordered to close until end-Nov.

ILOILO City Mayor Jerry P. Treñas has ordered all restaurant-bars to temporarily stop operating until the end of the month following reports of violations of health protocols and the liquor ban. “We will close all resto bars starting today up to the end of the month in deference to the rules of the national IATF (inter-agency task force). We cannot police all the bars in the city,” Mr. Treñas said in a statement issued on Nov. 16. Prior to Monday’s directive, the city government imposed a closure order against at least 24 establishments for serving alcoholic beverages, failure to install the required plastic barriers, or operating without a business permit. “I am very disappointed because I personally took time to explain to the restaurant groups and associations the need to stop serving alcoholic drinks,” the mayor said on Nov. 14, “When we allowed the serving of alcoholic drinks months ago, we found out that the cases went up. Drinking session with a group has become a mode of transmission. In one case, we traced up to 20 plus positive cases in one area because they were drinking together.” He added, “If we will have a spike in cases because of these violators, we will then be forced to lockdown our city again.” As of Nov. 15, the city had 4,215 total coronavirus cases, with 204 active, 3,903 recoveries and 108 deaths.

Transport dep’t signs deal with 3 firms for EDSA Busway bridges with concourse

SM Prime Holdings, Inc., D.M. Wenceslao and Associates, Inc., and Double Dragon Properties Corp. signed on Monday an agreement with the Transportation department for the construction of EDSA Busway bridges with concourse. The three private firms will be donating the structures, the Transportation department said in a statement. The bridges with concourse are “indispensable components of the new EDSA Busway to further provide safer, more convenient, and PWD (persons with disabilities)-friendly walkways for the riding public using the EDSA Busway stations, and for pedestrians crossing EDSA from one side to the other,” it added. The structures will be located at the following sites: SM Mall of Asia, SM North EDSA, SM Megamall, President D. Macapagal Boulevard in Aseana City, and at EDSA near the corner of President D. Macapagal Avenue. The EDSA Busway is a system that utilizes a dedicated median lane for public utility buses. It runs from Monumento in Caloocan City to the SM Mall of Asia in Pasay City. “Since its launch, the EDSA Busway has effectively reduced travel time from the previous 3-3.5 hours from Monumento to PITX, to just 50 minutes to 1 hour,” it said. — Arjay L. Balinbin

RCEP perks seen advantageous but PHL exporters still hampered

THE benefits of improved market access brought about by the newly-signed Regional Comprehensive Economic Partnership (RCEP) will outweigh any disruption that less-competitive economies might experience, Fitch Solutions Country Risk and Industry Research said.

Fitch Solutions, in a report issued Monday, said that the long-term consequences of the agreement will improve market access and increase the variety of goods and services made available to treaty signatories.

The RCEP counts as its members China, Australia, New Zealand, Japan, South Korea and all 10 ASEAN member countries. The members account for around a third of the global economy and population.

Fitch Solutions said that the agreement will also strengthen regional supply chains as manufacturing firms relocate out of China.

“ASEAN economies can also stand to gain from increased technical cooperation with advanced economies in the bloc to improve their competitiveness,” it said.

Citing issues specific to the Philippines, Fitch Solutions said exporters continue to be hindered by ease-of-doing-business and logistical issues.

“While the RCEP agreement provides the Philippines with greater access to the larger consumer markets of China, Japan, South Korea and Australia, we at Fitch Solutions highlight that red tape restrictions are only part of the barriers businesses face exporting from the Philippines,” Fitch Solutions Senior Asia Country Risk Analyst Michael Langham said in an e-mail.

“Logistical issues, energy security and domestic bureaucracy will hamper the potential to build out a greater manufacturing base in the Philippines. Indeed, the Philippines lags its ASEAN peers in its ability to attract diversifying supply-chains away from China, with Vietnam and Thailand better placed in the near term,” he said, adding that the trade deal could still be advantageous for the Philippine outsourcing industry.

Trade Secretary Ramon M. Lopez said the deal will incrementally increase the Philippines’ trade ties and market access within APEC. The Philippines has active free trade agreements with several APEC countries.

“The RCEP basically covers now a lot more areas, not only in trade in goods — it now has trade in services, investments, discussions on intellectual property protection as well as micro-SME, e-Commerce,” he said in an interview with ANC Monday, adding that the agreement will broaden the country’s sourcing of raw materials.

According to Trade Justice Pilipinas, which advocates for equitable trade, the agreement will deepen inequality as it does not grant sufficient flexibility for less-developed ASEAN member states, noting that it could threaten the jobs of worker in the Philippines.

ANZ Research in a report also released Monday said economic benefits will not be immediate, as member-countries go through a ratification process of about two years.

“But the strong signal that it sends about the region’s commitment to integration cannot be underestimated, especially given recent concerns about de-globalization,” it said. — Jenina P. Ibañez

Economic team studying typhoon’s budget implications

PHILIPPINE STAR/MICHAEL VARCAS

THE government’s economic team is studying whether this year’s P4.1-trillion budget will need to be augmented to fund the rehabilitation effort after major typhoons hit Luzon.

“We are in the process of evaluating the damage of the series of typhoons and the amounts required to address these, and will determine whether or not the current budget will be sufficient,” Finance Secretary Carlos G. Domiguez III said in a Viber message Monday.

Officials dealing with the economy are currently reassessing the government’s macroeconomic assumptions and fiscal program after gross domestic product contracted by a deeper-than-expected 11.5% in the third quarter, rendering the earlier full-year forecast of a 4.5-6.6% contraction no longer viable.

Crop damage caused by Typhoon Ulysses (international name: Vamco) hit P2.11 billion as of Sunday after it caused widespread flooding in Northern and Central Luzon and parts of Metro Manila.

Ulysses was among five typhoons that struck the Philippines this quarter, causing P38 billion in damage so far.

Damage inflicted on the agriculture sector could push food prices higher, but early harvests may have limited the damage, according to a senior government economist.

“It will (push prices up) but last year, the same thing (Typhoon Ursula, known internationally as Phanfone) happened so we don’t expect the year-on-year level to be significantly different. Besides, the rice harvest is over. The only price impact will be on vegetables,” Finance Undersecretary and the department’s Chief Economist Gil S. Beltran said in a text message Monday.

The impact on inflation will also be minimal as long as the supply of food continues to flow, Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a Viber message.

Inflation rose 2.5% in October from 2.3% in September, driven by higher prices of food and non-alcoholic beverages. This brought the 10-month average to 2.5%, well within the central bank’s target of 2-4%.

In a report, the National Economic and Development Authority (NEDA) said programs for the agriculture sector should also contain measures that will improve its ability to resist and rebound from natural disasters.

“Hence, we underscore the need for increased investment in climate-resilient technologies and infrastructure. While the DA’s (Department of Agriculture’s) Plant, Plant, Plant program and RCEF (Rice Competitiveness Enhancement Fund) aim to boost productivity, disaster resilience may need to be integrated in these measures to improve the agriculture sector’s adaptability to changing weather conditions,” the NEDA said.

More cold storage facilities and warehouses are also needed to extend the shelf life of produce.

It said disaster management systems of the national and local governments should be improved and backed the creation of the Department of Disaster Resilience to improve coordination, monitoring and implementation of programs across various agencies.

“Proposed legislation will provide a clear operational framework to address the fragmented institutional functions and actions among concerned agencies for all possible calamities in the future, including public health emergencies such as pandemics,” it said.

The World Bank estimated that the Philippines sustains typhoon and earthquake damage of P177 billion each year on average to public and private assets. — Beatrice M. Laforga

Business groups warn about loss of incentives under CREATE measure

INDUSTRY ASSOCIATIONS are warning that the loss of fiscal incentives under a proposed tax reform bill could worsen employment conditions, which are already under pressure due to the coronavirus disease 2019 (COVID-19) pandemic.

Business groups last year said that the then-current version of the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) could likely result in 700,000 lost jobs. The bill proposes to reduce corporate income tax while rationalizing tax incentives.

The loss of tax incentives, coupled with the slowdown caused by the pandemic, will drive unemployment numbers higher, the groups said in a virtual news conference Monday.

“The numbers I gave are pre-COVID,” Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said.

“As far as the electronics industry is concerned, it may have got worse. In fact, you know, certain government agencies don’t believe that this is real but already I’ve seen the start — the tip of the iceberg. There are two companies that have announced their shut down.”

The electronics industry recently upgraded its 2020 growth projection to a contraction of 5%, from the earlier forecast of a 15% decline, after demand for industrial, consumer, mobility, and medical electronics spiked. The industry expects 7% growth next year, “assuming favorable CREATE outcome.”

John Forbes, senior adviser to the American Chamber of Commerce of the Philippines (AMCHAM), said the lockdown had caused some companies to shift production to their other sites in Southeast Asia.

Philippine Ecozones Association (PHILEA) President Felix Francisco Zaldarriaga said the industry is seeing workforce reductions even without an outright locator exodus.

“It really doesn’t make any sense (to tamper) with the one ingredient that’s keeping these guys here,” he said. 

Mr. Lachica added that investors could stay during a transition period included in the bill.

“But what happens after? If our incentives are not going to be competitive with our neighbors, it’s open season. But the danger is, even during the transition period… there’s no guarantee that expansions (involving) new technologies and new businesses will come. That’s the risk,” he said.

The industry groups agreed that they prefer one of the options proposed by Senator Ralph G. Recto, which would distinguish export enterprises from domestic companies. After an income tax holiday period, a Special Corporate Income Tax based on gross income earned will remain in perpetuity for export enterprises under this proposal.

“We believe Senator Recto’s proposal for grandfathering incentives will ensure that existing investors will continue to invest in the country in the long term,” they said in a statement.

A study commissioned by the Labor department indicates that CREATE will increase jobs and reduce poverty by improving foreign direct investment and reducing the prices of consumer goods.

The industry groups represented in the news conference include SEIPI, PHILEA, the Information Technology and Business Process Association of the Philippines, AMCHAM, the Confederation of Wearable Exporters of the Philippines, and Philippine Association of Multinational Companies Regional Headquarters, Inc. — Jenina P. Ibañez

DoubleDragon to seek approval for P14.7-B REIT offer

DOUBLEDRAGON Properties Corp. hopes to file its application for a P14.7-billion real estate investment trust (REIT) offering within the week in order to raise funds to expand its portfolio of leasable properties.

In a statement Monday, the property developer said it has a pending application to change the corporate name of its subsidiary DD-Meridian Park Development Corp. to DDMP REIT, Inc., and to amend its articles of incorporation to prepare for the REIT initial public offering (IPO).

“The company expects to file its REIT IPO application with the SEC (Securities and Exchange Commission) and PSE (Philippine Stock Exchange) within the week,” it said.

Proceeds from the REIT listing will support the company’s plan to build about 425,000 square meters of floor area, which will expand the share of its recurring-revenue businesses, it said.

“The DDMP basket is seen to be a compelling REIT offering since it will include the land, a premier corner lot located along the main thoroughfares of Macapagal Avenue, EDSA Extension and Roxas Boulevard, where the first six completed buildings sit on,” DoubleDragon Chairman and CEO Edgar J. Sia II said in the statement.

“The value of the prime double corner 4.75 hectare block of land with titled land ownership to be held in perpetuity should keep on appreciating decade after decade, a very important inclusion for both domestic and foreign investors,” he added.

DoubleDragon is planning REIT offerings every year until 2025, which will involve about 200,000 square meters of leasable assets each year. This will help the company complete 1.2 million square meters of leasable property by 2022 and increase its total equity to P120 billion by 2030.

In the first nine months, DoubleDragon reported a net profit of P5.03 billion, up 61% from a year earlier. Revenue grew 41% to P9.79 billion.

Excluding unrealized fair-value gains, core profit rose 15% to P1.19 billion, while core revenue increased 9% to P4.31 billion.

Growth was driven by the increase in net completed leasable space and improved retail sales by tenants, which it linked to the relaxation of coronavirus-related quarantine rules. Rental income rose 25% to P2.96 billion, while recurring revenue improved 16% to P3.33 billion.

Separately, Mr. Sia’s other listed business, grocery operator MerryMart Consumer Corp., reported a 26% rise in net profit to P14.5 million in the nine months to September.

Consolidated revenue rose 28% to P2.42 billion after the period ended with 18 operational branches. The company hopes to open seven more branches before the year ends.

“MerryMart is in a business where a certain level of volume and branch network coverage is needed to achieve optimum operational efficiency and effective consumer brand pull. For that reason, during the second half of this year, we continued to ramp up our team and equip and enhance the backend support of the company as it prepares to soon reach its desired execution velocity,” Mr. Sia said in a statement.

“2020 is a reset year, 2021 a recovery year, and 2022 to 2030 should be highly promising growth years. Our team will continue to strive hard with vigor to cause both DoubleDragon and MerryMart to, in time, be in a position where it can efficiently and significantly capture that next great cycle ahead,” he added.

On Monday, DoubleDragon rose 16 centavos or 1.11% to P14.60, while MerryMart picked up 40 centavos or 9.03% to P4.83. — Denise A. Valdez

APEC economies seen contracting 2.5% due to pandemic

THE Asia-Pacific Economic Cooperation (APEC) bloc said its member economies are expected to post contractions of 2.5% this year on average, equivalent to about $1.8 trillion worth of lost output, as a result of the economic disruption caused by the pandemic.

“Prolonged stay-at-home measures, mandatory or voluntary, to safeguard health amid an ongoing pandemic, have translated into significant cutbacks in consumption and investments. As a result, the APEC region is expected to contract in 2020 by 2.5%,” the APEC Policy Support Unit said in its Regional Trends Analysis report issued Monday.

The new forecast represents an upgrade from the previous estimate of a 2.7% contraction issued in May, but if the forecast is borne out, it will be the first annual contraction among the member economies in three decades, it said.

APEC has 21 members: the Philippines, Australia, Brunei, Canada, Chile. China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Russia, Singapore, Chinese Taipei, Thailand, the United States and Vietnam.

APEC economies contracted 3.7% in the first half after growing 3.4% a year earlier due to the lockdowns imposed on both sides of the Pacific.

Domestic household spending, which has consistently been a growth driver for the bloc, declined 7.1% in those six months while investment fell 11.2%.

Trading activity was also severely affected by the travel bans and border closures imposed to curb the spread of coronavirus disease 2019 (COVID-19), while factory activity was also weighed down by lockdowns and weak demand.

“COVID-19 has been hardest on the poorest and most vulnerable in our societies: the people who can least afford healthcare, have the least access to infrastructure and technology and with the most precarious hold on jobs,” it said.

APEC’s policy support unit said member-economies should be supported by fiscal and monetary policy actions to help bring back confidence and stimulate growth.

However, it said countries struggling to contain the spread of the virus will likely lag the recovery since the business environment will not improve as rapidly.

It expects APEC members to grow 5.2% next year, lower than the earlier projection of 6.3%.

“GDP growth projections for 2021 reflect an economic rebound for the APEC region and the world at 5.2%, although lower compared to earlier forecasts. The lower projection reflects uneven growth across economies, with those that have managed to rein in the pandemic and reopened earlier expected to turn in better output outturns, while other economies, particularly where COVID-19 cases are either rising or resurging, are projected to grow at a slower pace,” it said.

The Philippines is among the economies struggling to bring down case numbers. There were 1,530 new COVID-19 cases reported Sunday, which brought the total to 407,838, according to the official count.

APEC said a resurgence of coronavirus will remain the “most dominant and dangerous” downside risk to the growth outlook as this threatens the capacity of health systems and may result in new rounds of lockdowns.

Moving forward, APEC said members should also push forward with their structural reforms and learn to adopt new technologies to ensure their post-crisis economies are resilient.

“Much work is also needed in the medium term to ensure a firmer recovery. What is imperative and appropriate could vary among economies at different stages of economic and technological development, but structural reforms need to be introduced, implemented and enforced now,” it said.

Senator backs NEDA view that OFW dep’t is secondary priority

THE AUTHOR of the Senate bill creating a department for overseas Filipino workers (OFWs) expressed support for the position adopted by economic planners that creating the agency is low on the government’s priority list.

The proposed Department of OFWs, declared a priority measure by President Rodrigo R. Duterte, is facing headwinds in the Senate as legislators take the position that the government should be right-sized.

As such, Senator Juan Edgardo M. Angara also raised the possibility during Monday’s session that the proposed department have an expiration date.

“The OFW department… shouldn’t be permanent. There must be an exit strategy,” Mr. Angara said, citing Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua, who heads the National Economic and Development Authority (NEDA).

Mr. Angara was speaking as a sponsor of the bill creating the department during the plenary deliberations for the P4.5-trillion national budget for 2021.

NEDA has also called for a cost-benefit analysis before the new department is established, which will help improve proposed measures identified during Mr. Duterte’s fifth State of the Nation Address.

“The NEDA secretary is of the view that perhaps right at this moment or in the near future, we should focus on COVID response; when we get out of these dire straits, then we can focus on the creation of that department,” he said.

Mr. Angara was responding to queries from Sen. Emmanuel Joel J. Villanueva, who chairs the chamber’s labor committee, about the NEDA position on the new department.

Some 8,831 more overseas Filipinos returned last week, bringing the total beneficiaries of the Department of Foreign Affairs’ repatriation program to 254,785 since February.

The Department of Finance supports the measure with reservations, citing the ongoing push to right-size the government; while the Department of Budget and Management raised concerns about government functions being devolved to local government units (LGUs).

“The DBM noted that in light of the implementation of the Mandanas decision by fiscal year 2022, the creation may impact the overall personnel services level considering the functions need to be devolved to the LGUs,” Mr. Angara said, referring to a Supreme Court ruling granting a greater share of national government revenue to LGUs.

Majority Leader Juan Miguel F. Zubiri, for his part, stumped for the passage of the right-sizing bill to allow the chamber to proceed with the creation of new departments, particularly the DDR (Department of Disaster Resilience).

Mr. Zubiri pointed out the need for a DDR in light of Typhoons Quinta, Rolly, and Ulysses that recently hit the country. — Charmaine A. Tadalan

Online communication with government agencies

Last week seemed like a bad case of déjà vu with parts of Metro Manila being under water again, some 11 years ago after the last serious flood. TV stations broadcast  images of people trapped on their roofs waiting for rescue, pets being rescued by their humans, and government resources stretched to the limit in responding to the needs of those devastated by the typhoon.

As if the COVID-19 pandemic were not enough to test our mettle, the typhoons wreaking havoc on parts of the country seemed designed to test just how resilient we really are.

Even so, life goes on. Businesses and citizens have found ways to adapt to new practices and policies. Without the new practices, their ability to get through this trying period is compromised. The same is true for government agencies. The strict quarantine rules at the start of the pandemic forced a lot of government employees to work from home. Even with the easing of quarantine, some government agencies were still operating with a skeleton force and alternative work arrangements. These resulted in delays to some government services or some taxpayer requests being left unattended.

Notably, most government agencies had e-filing and e-payment systems in place even before the lockdown. However, a lot of them do not have procedures allowing for online communication with taxpayers and applicants in lieu of face-to-face meetings.

Prior to the lockdown, taxpayers could go to government agencies and discuss their concerns with officers. In some cases, a phone call to a government agency yielded the needed information. However, with the health precautions in place at most government offices, face-to-face discussions and submissions of documents have not been allowed. Even a phone call is not an option as the handling examiner or case officer may not be in the office to answer the inquiry.

The inability to communicate with government officers handling an inquiry or application is immensely frustrating. In some cases, the application or request is not acted on because additional requirements were not communicated to the taxpayer or applicant in time. On the side of the applicant or taxpayer, there is always an element of uncertainty whether documents couriered or left in a drop box have, in fact, reached the handling officer.

Thus, it is encouraging to see that some government agencies have put systems and procedures in place to ensure effective communication with taxpayers or applicants despite the lockdown and alternative work arrangements. These systems assure us that the government is also keeping pace with the need to adapt to the new normal in ensuring that government services are not delayed.

For example, the Securities and Exchange Commission (SEC) now requires the submission of official e-mail addresses and mobile phone numbers by all entities under their jurisdiction. On the one hand, the SEC will also use such official contact details for sending orders, decisions, replies and other notices to the corporation, association, partnership or individual. On the other hand, the official e-mail addresses and phone numbers must be used by the corporations and associations for online filing and submission of letters, requests or other applications to the SEC. 

The submission is required under Memorandum Circular No. 28-2020 posted on the SEC website on Oct. 27. The compliance deadline is not later than 60 days from the effectivity of the memorandum circular.

Likewise, the Bureau of Internal Revenue (BIR) has made available the eAppointment system for large taxpayers who want to schedule an online/virtual meeting with revenue officials from the Large Taxpayers Service (LT Audit Divisions and LT Field Operations Division). While the system is available only for large taxpayers for now, we hope all other offices of the BIR will also discover the convenience of virtual meetings and use them as the default mode for meeting with taxpayers.

Of course, systems have to be in place to make virtual meetings with government officers viable. Most importantly, the government has to make a serious investment in capacitating their offices with fast and reliable internet connections. Every government employee dealing directly with applicants must have an official e-mail address through which applicants can directly communicate with them.

It is disappointing that some government employees do not even have official e-mail addresses and have to rely on their personal Yahoo or Gmail addresses in communicating with taxpayers and applicants. In some cases where they have official e-mail addresses, the restrictions on use do not allow for any sort of document to be sent as an attachment, making them virtually useless.

With the BIR recognizing virtual conferences as an acceptable mode of meeting with taxpayers, we hope other government agencies and local government units will follow. With business permit renewals due in January, taxpayers are expected to crowd the city halls to submit documents. There must be an efficient e-submission, e-payment and e-meeting system in place to allow taxpayers to efficiently renew their business permits and pay their taxes without having to queue. 

Indeed, we are all forced to adapt, and the government must keep up with the changing modes of delivering services if they are to thrive in this new normal.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Eleanor Lucas Roque is a principal of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

The social dilemma: What’s the first thing you do upon waking up?

Some would answer, “I pray and say THANK YOU for having been awakened out of my sleep.” Okay that’s good. What’s the next thing you do? You reach for your phone and check your messages. Or maybe check Facebook. Yes, an average person checks his or her phone 150 times a day or more.

Two former executives of Google and Facebook/Pinterest left the Big Tech companies to found the Center for Humane Technology and Moment — two companies which are now the conscience of social media. I am talking about Tristan Harris and Tim Kendall. Google them. Harris had been a design ethicist for Google while Kendall used to be the Facebook Head for Monetization. I saw them on Bloomberg TV being interviewed by Emily Chang and it got me thinking. I also saw them in the Netflix movie, The Social Dilemma. You have to watch the documentary and decide if you will get out of social media, control your children’s exposure to it, or be the big force in making society and governments change how Big Tech is shaping our lives. It’s something we need to be concerned about and I wish I could articulate how Harris explains it using psychology and persuasive psychology.

Kendall has also removed access to gadgets from his kids, making them learn under the trees and stars instead. You could say they are probably at the other end of the spectrum now — they are concerned that social media will ruin society’s moral fiber. It’s logical. Harris says “it’s a race to the bottom of the brain” and it’s about who gains more of your attention and time. “So, think how fossil fuels are now being replaced by electric,” Kendall says. It needs the state or all states of the world to bear down on Big Tech and use them for good rather than to incite outrage and rebellion, hate, and depression. Truly the governments must bear down on these behemoths and have them change their business model.

Harris continues, “They say they mirror society,” and he explains that the social media platforms give you a distorted view of reality — made up of Likes and Comments — because as the hate is fueled, people are fed more hateful feeds! “It is a distorted view,” he says, like a funhouse mirror that gives you a society that social media created. People react because of what they see on Facebook, like fake news and “bandwagon mentality” making them outraged at an event or a social poll or a presidential candidate. It sows fear, hate, and even violence.

So, do we just opt out and turn our backs on social media? Or has it become the only way to do our marketing and we have no choice now? Do we pay for sponsored ads and boost ads and feed the very people who are destroying our society? I got to thinking, what does a business need to do now? Influence the government to take a stand. Bear down on Big Tech to be more responsible.

And this is why China’s rules make sense. They do not have Facebook or Instagram. So their society is shaped by their own rules and societal norms — even if they differ from the rest of the world. Do you know that China will be the only country with a positive GDP by 3rd quarter among all the nations in the world? Because they have their own rules and laws — they attended to infrastructure first during COVID-19 and made consumption their last concern. They concentrated on their strength (infrastructure) in construction. They made domestic consumption resume only last August — unlike everyone else that was wavering between health and commerce. But that’s why it’s China. They make the rules. They don’t bend with anyone’s rules.

So, although social media is what we have left due to quarantine protocols preventing real life socializing, we need to be careful about how it consumes us. Are you confused yet? I was and am still thinking of how business can go on without it. Even if we are interested only in news and current events, we still get it via Social media!!

What to do to be enlightened about this:

1. Watch the Social Dilemma on Netflix.

2. Catch Tristan Harris and Tim Kendall on TED Talks and other interviews.

3. Think about how we can control social media, rather than it controlling us.

4. Advocate for a change in the business model of these Big Tech firms.

It is not a solution to just OPT OUT of social media. We need to control and manage what it is doing to society. Harris says we cannot wait 10 years, because it may even explode in a year or so.

If you can find time to open Facebook, find time to see how responsible they can be. We are all part of the damage we are causing ourselves.

It is indeed a social dilemma.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Chit U. Juan is a member of the MAP Communications Committee and the MAP Inclusive Growth Committee. She is the President of the Philippine Coffee Board, Inc. and runs a social enterprise called ECHOstore.

map@map.org.ph

pujuan29@gmail.com

http://map.org.ph

Welcome to the might-is-right global trade era

IF YOU WANTED a demonstration of how the world’s largest free trade area is likely to fall short of expectations, you could do worse than look at the customs sheds at Shanghai’s Pudong airport.

As final preparations for signing the Regional Comprehensive Economic Partnership pact, or RCEP, were being made earlier this month, several metric tons of Australian lobster were being delayed at the Chinese border for several days — far longer than the six-hour time frame for perishable goods under RCEP rules. That was owing to an unofficial order from Beijing to hold up seven categories of products from the country. Diplomatic relations between the two have been fraying and China’s foreign ministry this month told Australians to “reflect upon their deeds” if they wanted a better economic relationship.

To engage in economic coercion of your trading partners while simultaneously joining them in a new trading bloc is an appropriate emblem of our times. Attempts to build a rules-based global order after the fall of the Soviet Union have given way to a new era of might-is-right diplomacy. The trend is so pervasive that even touted free-trade deals are being shaped in its image.

To be sure, the final texts to emerge from the RCEP look surprisingly positive. India’s decision to pull out last year probably made it easier for the remaining countries to come to agreement. Possibly as a result, the wording on sticky issues like investment, services, and agriculture looks stronger than anticipated, according to an analysis by Deborah Elms, executive director of the Singapore-based Asian Trade Center.

Even so, the bloc will fall short of the sort of comprehensive agreement seen in the European Economic Area or even the reformed Trans-Pacific Partnership, known as the CPTPP, which now binds key RCEP members including Australia, Japan, and Vietnam after the US dropped out.

From one perspective, that doesn’t really matter. The agreement will lift China’s gross domestic product by 0.5% over the period to 2030, according to Bloomberg Intelligence economist Yuki Masujima. South Korea, which hasn’t hitherto joined a major trade bloc, will see a 1.4% benefit, while the uplift for Japan will be 1.3%.

The trouble is that those gains, while real, are so modest. The vision that drove the founding of the World Trade Organization saw nations across the world reducing their tariffs, harmonizing their rules, and agreeing to a common dispute and enforcement mechanism to encourage more commerce and investment across borders.

The RCEP and CPTPP revert to an older vision of trading blocs, where deepening integration within the zone is matched by fraying ties with outsiders. An outgrowth of the Association of Southeast Asian nations, the RCEP is increasingly now seen as a sort of Pax Sinica, binding the region into a China-led global order. CPTPP, for its part, was explicitly sold as an American attempt to restrain China’s global ambitions before Washington itself quit the grouping.

That feels less like free trade and more like imperial preference, which prevailed across much of the world in the late 19th and early 20th centuries. Under that system, Europe’s powers ran trade surpluses with their empires while erecting barriers externally. The withering of intra-European economic ties ultimately contributed to the disaster of the First World War.

As authors Matthew Klein and Michael Pettis have written, the uneven balance of payments also impoverished the colonies on which the system depended. That pattern is being repeated now, as inequality within major trading nations and the imbalances between them feed off each other in a deepening spiral that’s driving dissatisfaction, unrest, and nationalist populism.

On their own, neither the RCEP or CPTPP are going to take us down that road. As we’ve written, four years of fiery rhetoric between Beijing and Washington haven’t stopped China becoming ever more integrated with the world economy. Still, the World Trade Organization has been turned into a toothless tiger, and even its current diminished form is under attack, with the US vetoing Ngozi Okonjo-Iweala’s bid to take over as director-general. Despite a recovery from the depths of coronavirus, world trade volumes are still running at their lowest levels in four years. We shouldn’t let the signing of a new deal blind us to the parlous state of global commerce.

BLOOMBERG OPINION

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