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Senate, Finance department move to expedite tax reform legislation

THE SENATE Ways and Means committee will conduct parallel tax reform hearings with the House of Representatives, while the Department of Finance (DoF) has begun meeting with both chambers, in order to ensure prompt approval of the bills.

“I have started consultations with the DoF and soon will conduct hearings, open to all sectors,” Ways and Means committee Chairperson Senator Pia S. Cayetano said in a statement.

“As chair of the Senate Ways and Means committee, I look forward to working with our counterparts in the House of Representatives and our economic managers led by the Finance department in exploring ways to fund social services for our people.”

Section 24 of Article 6 of the 1987 Constitution provides that all appropriation, revenue and tariff bills should originate from the House.

Senate President Vicente C. Sotto III had said in a mobile phone message on Monday that the chamber could decide to hold parallel hearings, as practiced in the past Congress. “Pwede, it’s up to her,” Mr. Sotto said, referring to Ms. Cayetano.

President Rodrigo R. Duterte, in his fourth State of the Nation Address on July 22, asked the 18th Congress to pass all the remaining tax reform measures by the end of 2019.

The DoF has been meeting with lawmakers ahead of the tax hearings. “We are now in regular talks and briefings with relevant legislative committee chairs for the coming hearings,” Finance Assistant Secretary Antonio Joselito G. Lambino II said in a text message on Tuesday.

The government has so far enacted Republic Act No. (RA) 10963, which slashed personal income tax rates and increased or added levies on several goods and services; RA 11213; the Tax Amnesty Act of 2019 that grants estate tax amnesty and amnesty on delinquent accounts that remained unpaid even after final assessment; and RA 11346, which will gradually increase the excise tax rate on tobacco products to P60 per pack by 2023 from P35 currently.

Remaining tax reforms up for legislation consist of proposals to reduce the corporate income tax rate gradually to 20% by 2029 from 30% currently and to make fiscal incentives time-bound and performance-based; to further increase the excise tax on alcohol products and electronic cigarettes; to centralize real property valuation and assessment; and to simplify the tax structure for financial investment instruments.

These had been approved on final reading in the House by December last year but remained at the committee level in the Senate as the 17th Congress ended on June 3.

Of the proposed tax laws, the DoF hopes the second package, which will cut corporate income tax rates to make them at par with those within Southeast Asia and will overhaul tax incentives, will be prioritized. “Ang marching order kasi is to pass all of them by the end of the year…” Mr. Lambino said. “All of them are priorities pero kung siguro meron talagang kailangan i-prioritize in terms of timing, sana ’yung Package 2 (but if there is a need to prioritize in terms of timing, let it be Package 2).” — Charmaine A. Tadalan

Indonesia considering diaspora bond sale in bid to widen funding

JAKARTA — Indonesia is planning to sell bonds to its citizens living overseas as Southeast Asia’s largest economy seeks to expand its funding pool and reduce the dependence on foreign fund inflows for financing a budget deficit.

The government is studying the so-called “diaspora bonds,” which will target non-residents from migrant workers to students, according to Luky Alfirman, director general for financing and risk management at the finance ministry. Details of the type of debt instrument, its tenor, denomination and transaction costs are being still discussed, he said.

The diaspora bonds are part of the plan to reduce high foreign ownership of Indonesian securities that makes the nation one of the most vulnerable emerging markets. The government raises about $10 billion annually from overseas selling dollar, euro and yen denominated securities and sukuk. The government also sees “enormous” potential in boosting domestic retail ownership of sovereign bonds from about three percent now, Mr. Alfirman said.

“Our migrant workers also need an investment instrument,” Mr. Alfirman said in an interview in his office on Thursday last week.

“We can set the minimum purchase at 1 million rupiah ($71) for them, just like the model we use for our retail savings bond” and securities can be in denominated in dollars or rupiah, he said.

While Indonesians in the Middle East may prefer sukuk and those in Japan or the US might like with the conventional securities, authorities are still working to “find the best possible scheme,” Mr. Alfirman said.

Indonesian expats may total about 8 million, official data show.

While Indonesia needs portfolio investment to finance its development, high foreign ownership makes the country vulnerable to capital outflows during periods of volatility, Mr. Alfirman said.

Foreign ownership of rupiah-denominated sovereign notes, which make up more than 80% of bonds sold annually is at more than 39%, official data show.

GLOBAL RISKS
“The government plans to gradually decrease foreign ownership in bonds, not by limiting it, but by expanding domestic investors base,” Mr. Alfirman said, adding the ministry will stick to its strategy of issuing more rupiah-denominated bonds to mitigate risks coming from global volatility.

With the budget deficit forecast to widen to 1.93% this year, the government may issue additional bonds or seek loans to finance the shortfall, Alfirman said, adding it has the room to consider another global bond sale if needed.

To attract more domestic investors, Indonesia is also reviewing the tax rates applicable on all financial market instruments, including bonds yield, Alfirman said. Finance Minister Sri Mulyani Indrawati last month said the government will slash the income tax on gains from infrastructure bonds to 5% from 15%.

“The window to review the tax treatment is open because we are now in the process of amending the Income Tax Law,” Mr. Alfirman said. — Bloomberg

Megaworld ramps up provincial mall expansion

By Arra B. Francia, Senior Reporter

MEGAWORLD Corp. is spending P10 billion to develop eight new malls in the provinces until 2022, as it looks to hit one million square meters (sq.m.) in retail spaces by then.

The property company of tycoon Andrew L. Tan said Tuesday it will open over 200,000 sq.m. of new retail inventory in Cebu, Bacolod, Davao, Boracay, Cavite, and Pampanga.

“For the next three years, the Megaworld Lifestyle Malls brand will be seen in key growth areas around the country as we continue to tap opportunities for our retail partners to further expand and grow their brands with us,” Megaworld Lifestyle Malls Head Graham Coates said in a speech during the unveiling of the mall division’s new logo in Taguig yesterday.

This includes Maple Grove Mall, located in General Trias, Cavite. The mall takes its design from greenhouses and will be surrounded with gardens and trees, reflecting the theme of the Maple Grove township.

It will also open Northill Town Center — a hacienda-style commercial center — in Northill Gateway in Bacolod City.

“We veer away from standardizing our malls. We study and curate them based on what its location is all about. We want each mall to have its own charm and identity — something that makes each one ‘endemic’ to the city where it is located,” Megaworld Chief Strategy Officer Kevin Andrew L. Tan said.

Mr. Tan said they will build two malls in Bacolod, one for each of their townships in the area. The company also has the option to build two malls in one township depending on its size.

The new malls in the pipeline will be added to Megaworld’s network of 17 lifestyle malls covering about 710,000 sq.m. in total retail space.

With this, Megaworld will end 2022 with 25 malls spanning about one million sq.m.

The company’s existing malls include Eastwood Mall in Quezon City, Uptown Mall, Venice Grand Canal, and Forbes Town in Taguig City, Newport Mall in Pasay City, and Lucky Chinatown in Binondo, Manila, Southwoods Mall in Biñan, Laguna, and Festive Walk Mall in Iloilo City.

Mr. Coates added that they are also expanding some of their existing malls in Metro Manila.

“Most of our existing malls have areas for expansion…we believe the template we have is doing very well, and we believe that it can be expanded,” Mr. Coates said.

Mr. Tan also noted that the goal is to build a mall in every township that they have. The company currently has 24 townships in the country, which is seen to reach 30 by 2020.

Megaworld booked a net income attributable to the parent of P3.8 billion in the first quarter of 2019, 16% higher year on year, following a 15% uptick in consolidated revenues to P14.9 billion.

Shares in Megaworld climbed 1.61% or 10 centavos to close at P6.30 each at the stock exchange on Tuesday.

Tiu’s Infradev inks 50-year deal for Makati subway

By Denise A. Valdez, Reporter

PHILIPPINE Infradev Holdings, Inc. signed yesterday its joint venture agreement (JVA) with the city government of Makati for the construction and operation of the $3.5-billion intracity subway project.

The Antonio L. Tiu-led firm inked the 50-year deal at the Makati City Hall Tuesday, after posting its $350-million performance bond to undertake the Makati City Subway Project.

“The project is undertaken by the private proponent… But the city will be a minority shareholder as a part owner because of some contributions in terms of the land that will be used for the stations,” Mr. Tiu told reporters after the signing program.

Philippine Infradev will be in charge of building the 10-kilometer railway system and handling its operations and maintenance after its completion.

Construction is slated to begin in December with the arrival of the tunnel boring machine.

“The construction, hopefully the tunnel boring machine will arrive by December this year. (This) is the technology we will use to ensure that the project will be completed on time,” Makati Mayor Mar-Len Abigail S. Binay-Campos said at a briefing after the contract signing.

At least eight of the 10 stations of the underground railway is scheduled to open in 2025. Once operational, the Makati City Subway is seen to help ease road congestion by offering an alternative transportation means that will accommodate 700,000 passengers daily.

Ms. Binay said the subway is expected to cut travel time from the University of Makati to SM Makati to 10 minutes from the usual one hour by road.

Mr. Tiu said Philippine Infradev hopes to recoup its investments from building the subway after 10 years, with profitability seen in about five years from the start of operations.

“We expect to recover our investment in probably 10 years after operations. We will lease property, we will offer advertising opportunities, a lot of non-fare revenue that are significant so we don’t have to charge passenger high fares,” he said.

“We should start generating positive cash flow in year five or year six,” he added.

End-to-end fare at the Makati City Subway is expected to be close to the fares implemented at the Metro Rail Transit Line 3, or a little above P20.

Joining Philippine Infradev in the construction of the Makati City Subway are Chinese partners Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd.

New law re-focuses functions of the National Museum

REPUBLIC ACT (RA) 11333, or the National Museum of the Philippines Act, takes effect today. The Act clarifies the role of the National Museum.

On July 16, Malacañang released a copy of the new law which aims for the State “to pursue and support the cultural development of Filipino people, through the preservation, enrichment and dynamic evolution of Filipino national culture.”

“The RA is the fruit of our experience over the last years in running the museum under the old charter RA 8492,” National Museum director Jeremy Barns told BusinessWorld on July 25 at the National Museum of Natural History, at the sidelines of the general assembly of the Museum Foundation of the Philippines, Inc. “Over the years, we have identified strengths, weaknesses, and gaps… all of those learnings we tried to put into this law,” he said.

The law was passed with the help of representatives from Senate and Congress who are members of the Board of Trustees of the National Museum.

“We did a workshop four years ago and then, at the start of the 17th Congress on July 2016, we were ready with a draft bill,” Mr. Barns said.

The Act — a consolidation of Senate Bill No. 1529 and House Bill No. 8795 — was passed in the Senate and House of Representatives in February this year, and President Rodrigo Roa Duterte signed it into law in April.

CLARIFICATION OF FUNCTIONS
Under RA 11333, among the National Museum’s duties are to focus on developing the National Museum Complex, reaching out to the regions outside the NCR, among others. Several of its regulatory functions have been transferred to the National Commission for Culture and the Arts (NCCA).

Sec. 9 on the Master Plan of the National Museum Complex reads: “The National Museum shall develop the National Museum Complex within and adjacent to Rizal Park and other identified areas with reference to the Burnham Plan for Manila of 1905” which shall include venues for public exhibitions and “integrative infrastructure for its constituent buildings.” According to Mr. Barns, the masterplan is a roadmap to enhance [the National Museum Complex] further and integrate its activities.

Sec. 11 focuses on regional, area, and site museum and satellite offices. As the cultural agency with the largest regional presence, the National Museum currently has 14 existing regional museums nationwide — in Batanes, Ilocos, Cagayan Valley, Cordillera, Bicol, Rizal, Marinduque, Romblon, Iloilo, Dumaguete, Bohol, Butuan, Zamboanga, and Jolo.

“This is in line with the move to bring services to the regions. We want our regional museums to be the premiere cultural center of those places for the benefit of the people there. We want to be located near educational centers and tourism gateways,” Mr. Barns said.

A regional museum in Cebu is currently under development and targeted for completion in 2021 in line with the province’s 500th founding anniversary.

Afterwards, the National Museum hopes to extend operations in Eastern Samar.

NCCA’S ROLE
Sec. 30 states that the following regulatory functions: RA 4846 Cultural Properties Preservation and Protection Act (including PD 260 and PD 374); PD 1109 which declares the archeological areas in Cagayan Valley and Kalinga-Apayao archeological reservations; RA 8492 or National Museum Act of 1998; RA 9105 or Art Forgery Act of 2001; RA10066 National Heritage Act — are to be transferred to the NCCA.

According to Mr. Barns, the transfer of these regulatory issuances to the NCCA are meant to “remove conflicts of interest” and “allow the institution to focus on museum work.”

“We are collaborating directly with the [NCCA’s] office of the chair who is also a member of the board of trustees,” he said.

“We see our main job and core function is to promote museum development in the Philippines. But we are still obliged to provide all technical assistance and support to the NCCA in carrying out those functions. It’s just that the decisions and issuances won’t come from the National Museum,” Mr. Barns added.

NCCA Chairperson and National Artist for Literature Virgilio S. Almario affirmed that he is aware of the transfer of regulatory functions.

“We have to plan it well because we are also moving towards the organization of the Department of Culture,” Mr. Almario told BusinessWorld after the NCCA Buwan ng Wika kickoff on July 29 at the Liwasang Bonifacio in Manila City.

“If the Department of Culture materializes, all its [NCCA’s] functions will be transferred to that department,” Mr. Almario added.

The effectivity of the National Museum of the Philippines Act (RA 11333) repeals RA 8492 or the National Museum Act of 1998. — Michelle Anne P. Soliman

5G network now available in Pasig — Globe

GLOBE Telecom, Inc.’s fifth-generation (5G) network became commercially available in Pasig City over the weekend.

In a statement Tuesday, the telecommunications giant said its next-generation fixed wireless broadband service was launched for consumer use last July 27 in Brgy. Buting, Pasig City.

“We are now transforming more Filipino households to be digitally connected using 5G technology, especially in areas where we encounter challenges in rolling out fiber-optic cable,” Globe Senior Vice-President and Head of Broadband Business Martha Sazon said in the statement.

The Ayala-led telco is making its 5G service available to home subscribers for the initial rollout, dubbed commercially as Globe At Home Air Fiber 5G.

It is targeting to continue the deployment of 5G in September, bringing it to Greenpark in Cainta, Rizal; Woodland Hills in Carmona, Cavite; and Carissa Homes 2A and 2B, Palmera Homes in San Jose del Monte, Bulacan.

Ms. Sazon said the expansion of 5G will come in phases and is eyed to eventually reach 24 more areas across the country.

The 5G service of Globe is marketed to reach up to 100 megabits per second (Mbps) for a subscription price of P2,899 per month. It is also offered at a cheaper rate of P2,499 per month for a maximum internet speed of 50 Mbps, and P1,899 per month for a maximum speed of 20 Mbps. These promos are all backed with a data allocation of 2 terabytes.

Globe booked an attributable net income of P6.7 billion in the first quarter, up 44% year on year on the back of a robust growth of its data services.

It is allocating P63 billion for capital expenditures this year to support the enhancements of its data services. — Denise A. Valdez

Gov’t makes full award of 20-year bonds

THE BUREAU of the Treasury fully awarded its P20-billion bond offer.

THE GOVERNMENT made a full award of the reissued 20-year Treasury bonds (T-bond) it offered yesterday amid healthy demand as market participants await the policy decision of the local and US central banks.

The Bureau of the Treasury (BTr) raised P20 billion as planned from its T-bond offer yesterday after receiving bids totalling P29.814 billion.

The 20-year papers, which carry a coupon rate of 6.75%, fetched an average rate of 5.015%, 15.5 basis points (bp) lower than the 5.17% average fetched when the debt papers were last offered on June 11. The bonds have a remaining life of 19 years and six months.

Market players asked for returns ranging from 4.98% to 5.05% yesterday.

At the secondary market yesterday, the 20-year bonds fetched 5.022%.

National Treasurer Rosalia V. De Leon said the Treasury continued to see “very good and healthy” results during the auction as it saw strong demand from investors.

“We have strong demand for the long end of the curve, recognizing that first, the liquidity, and also the anticipation of the cut coming from the FOMC (Federal Open Market Committee) meeting,” Ms. De Leon told reporters yesterday.

The Bangko Sentral ng Pilipinas (BSP) completed its phased reduction of banks’ reserve requirement ratios last Friday, bringing it down to 16% for universal and commercial banks and six percent for thrift lenders, unleashing billions of pesos into the financial system.

Meanwhile, the US Federal Reserve is widely expected to trim rates when its policymaking FOMC meets on July 30-31. Economists see this as a move to counter headwinds brought by trade tensions as well as the slowing global growth.

Ms. De Leon added that market participants also factored in the earlier statements of BSP Governor Benjamin E. Diokno.

“Also, (market players also looked into) the earlier pronouncements of Governor Diokno about the cut in the policy rate that it would still be on the table. But of course, it’s still data dependent. They will continue to be patient as well,” she added.

Earlier, Mr. Diokno expressed commitment to cutting benchmark rates amid expectations of a rate cut from the Fed. “Even before the position of the Fed, we are already committed to cutting,” the central bank chief said last July 12. “So that’s an additional input to our decision.”

Sought for comment, Robinsons Bank Corp. peso debt trader Kevin S. Palma said the auction result was within expectations.

“The market awaits the FOMC decision this Thursday, where the Fed is widely expected to cut by 25 basis points,” Mr. Palma said.

The government is set to borrow P230 billion from the domestic market this quarter through Treasury bills and T-bonds.

It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Karl Angelo N. Vidal

Museum of Future Experiences uses VR for mind-expanding trips

By Claire Ballentine, Bloomberg

IF YOU find day-to-day reality terrifying, I’ve found a cure.

The Museum of Future Experiences, which opened last week in New York’s SoHo neighborhood and runs through the end of August, is the latest millennial “museum” to pop up, but it’s not one for taking selfies in front of colorful backdrops and sharing them on social media. Instead, visitors wear a virtual-reality-inducing Oculus Rift S headset and prepare to have their minds blown.

The museum is the brainchild of Bridgewater hedge fund alum David Askaryan, 32, who came up with the idea after realizing that virtual reality had failed to take off, not because of the actual technology, but because of a business model that mistakenly assumed people were going to buy VR headsets for their personal use.

“Most VR companies relied on a consumer infrastructure that isn’t there,” he says. “Virtually nobody has a VR headset at home.” Consumer VR software investments dropped off a cliff in 2018, down 59% to $173 million, from $420 million a year earlier, according to SuperData, a digital games and VR market-research company owned by Nielsen Holdings.

Mr. Askaryan’s solution was to create a museum experience — which comes with the cute nickname MoFE — using VR in set locations for short periods of time. He describes it as “a curated cerebral experience blending immersive theater, psychology, and virtual reality for an intimate exploration of individual and collective consciousness.” It’s funded by prestigious tech accelerator Y Combinator; tickets, which are purchased ahead of time, are $50 for an hour.

Kent Bye, host of the Voices of VR Podcast, sees potential in a model that creates spaces where individuals can test-drive VR, instead of buying their own $400 headsets. “More and more people want to be immersed into their entertainment,” he says. “I think we’re going to start seeing more people putting their body into these experiences.”

Especially millennials. A study by Harris Group found 72% of people in this generation prefer to spend money on experiences than on material things. Jeremy Bailenson, founding director of Sanford University’s Virtual Human Interaction Lab and an adviser to MoFE, says VR can be a tool “to help people think about themselves and how they relate to others.”

MoFE is not the first location-based VR experience. Tribeca Film Festival has a virtual arcade and a 360-degree theater, and at the Franklin Institute in Philadelphia visitors can use VR headsets to dive into the ocean or soar through the solar system.

Entertainment destination VR World in New York allows customers to use Oculus or HTC Vive headsets for video games, flight simulations, or movies, starting at $44 for two hours. “I consider VR to be the most impactful medium known to man,” says VR World Chief Executive Officer Leo Tsimmer. “We’re not looking at marking technology or marketing headsets. We’re in the business of entertaining and of creating fun times for friends.”

Gabriela Baiter, founder of experiential retail studio Whereabout, agrees. “I think it’s a result of people just craving human connection,” she says about the trend of location-based VR. “We’re starting to become more interested in getting out there and interacting with other people.”

I’d never tried VR before, and my video game expertise is limited to dodging banana peels in Mario Kart. Mr. Askaryan says that’s the point: “It opens up VR to a whole new set of customers.” So on a blisteringly hot Friday afternoon, I arrived with five others to “explore our individual and collective consciousness” in SoHo, itself a land where Instagram photos and Snapchat filters are valued as much as anything visible in real life.

The experience breaks down into roughly four 15-minute intervals. Once inside the loft space, we’re informed — three times — that it previously served as a workspace for Andy Warhol. After a receptionist inquires, rather ominously it sounds to me, if we’re ready for our mind-altering experience, we’re greeted by museum actors dressed in full white lab technician outfits worn under a clear plastic gown resembling a garment bag. It’s mad scientist-meets-futuristic time traveler, a look enhanced by their slicked-back hair. They warn us to inform them if our emotions overwhelm us and we need to take a break.

The actors lead our group to a downstairs room, where we’re seated in a circle with our backs to each other and given a paper and a pencil. We’re asked a series of 21 questions, to which we record our answers like an elementary school spelling test. The inquiries start off simple: How anxious are we on a scale of one to 10? (I was a four earlier in the day, a 10 now.) Then they rapidly progress into more uncertain territory: Did we regularly converse with any dead family members? Have we had an out-of-body experience? Were we worried about artificial intelligence destroying the world?

We submit these “prescriptions” and line up single file for our personalized VR immersion in the next room. Then we’re seated in partitioned booths and strap on Zorro-style black sanitary masks before the technicians help us situate the clunky VR headsets on our heads.

The images are supposed to be tailored to you, based on answers to the previous questionnaire. I must have done something wrong, because my screen shows a menacing female robotic figure who slowly emerges from a sewer system as she repeats the words “Do you remember the feeling of being watched as a child?”

I’ve never done LSD, but I imagine this is its effect in the mind of someone extraordinarily uncreative. After 10 minutes, the technician comes in and tells us to take a moment to let any insights sink in. I rack my brain for any memories of strangers peering through the window of my childhood bedroom.

I expect another immersive experience to soon follow, but the technicians then lead us to an adjacent room, leaving me to work out this newly introduced trauma with a qualified therapist. The passageway is lined with white gauze that drapes onto a small stage with six orange reclining chairs that look like something a dentist would use for the world’s worst dental canal.

This time they strap a sensor to our chests that could vibrate in sync with our VR experience. For this session, all six of us experience the same virtual reality, which is a walk through an unidentifiable cityscape with glowing orange flames in the distance. The blaze slowly grows larger until it swallows the sky in a tornado of fiery destruction.

The technicians tell us these images are an amalgamation of the group’s inner thoughts. I decide then and there to never see any of these people again.

To decompress from the immersion, we go back upstairs into a sitting area with cushioned beanbags. In one corner of the room is a small table with a single drawer and a gold sculpture of a thumbs-up signal, encircled by clear plastic curtain panels and illuminated by ceiling lights.

Each of us receives a “relic” in the table’s drawer, which is a postcard with an image to commemorate our journey. Mine features multiple colorful birds, looking much more peaceful than I felt.

In a circle, our group discusses the immersion and compares the images we saw with a mixture of daze and confusion. Evidently, I was the only one to see a robotic figure informing me of previously unacknowledged childhood terror — everyone else relaxed in a meadow or flew through white puffy clouds.

The entire experience from start to finish took about an hour, but our time with the VR headsets lasted only a combined 20 minutes. Although I’d expected a bit more time with it, in the end, maybe it was for the best.

Mr. Askaryan’s business model has potential — especially for someone who would never dream of shelling out $400 for a headset. But I’ve never been so happy to walk out into the reality of 98-degree heat in New York.

SEC moves deadline for NPOs to submit disclosure forms

THE Securities and Exchange Commission (SEC) has moved the deadline for registered nonstock corporations to submit the mandatory disclosure form until 30 days after it comes out with new guidelines.

In a notice posted on its website Monday, the country’s corporate regulator said the amendments will be in line with Memorandum Circular No. 15, Series of 2018, or the Guidelines for the Protection of SEC Registered Non-Profit Organizations (NPO) from Money Laundering and Terrorist Financing.

“The new mandatory disclosure form will be used upon effectivity of the amended guidelines. All concerned non-stock corporations are thus advised to await the release of the amended guidelines which will be posted at the commission website,” the SEC said.

The deadline for the submission of the form was originally scheduled on July 31.

Entities who have yet to submit their mandatory disclosure forms may submit their new mandatory disclosure form within 30 days after the new deadline.

A mandatory disclosure form is a six-page form which requires a nonstock corporation to provide information on its respective area of operations, accreditations it has secured from different government bodies, and information on whether it raises funds, as stated in its articles of incorporation.

It further asks for information on actual raising or disbursing of funds for charitable, religious, cultural, educational, social, or fraternal purposes. They must also provide the source of funds and their intended beneficiaries.

The form is part of the commission’s efforts to combat money laundering and terrorist financing.

The NPO Guidelines, published in November 2018, aims to protect nonprofit organizations from money laundering and terrorist financing abuse, and also to enhance the commission’s registration and monitoring system by obtaining the necessary information from such organizations. — Arra B. Francia

BoJ keeps policy steady, hints at more easing if inflation sputters

TOKYO — The Bank of Japan (BoJ) held off on expanding stimulus on Tuesday but signaled its readiness to do so “without hesitation,” if a global slowdown jeopardizes the country’s economic recovery.

Growing fallout from the US-China trade war has prompted major central banks to signal more easing and put pressure on the BoJ, which has far less policy ammunition left to deal with a significant downturn.

The central bank also trimmed its inflation forecasts and warned that risks to the outlook were skewed to the downside, nodding to heightening overseas uncertainties that could further delay achievement of its elusive 2% inflation target.

As widely expected, the BoJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%. It also said it was maintaining its massive asset buying program.

The BoJ kept intact its forward guidance, or a pledge central banks make on future monetary policy. It committed to keep interest rates at current ultra-low levels “for an extended period of time, at least through around spring 2020.”

But the central bank added a line in its policy statement that it will take additional easing steps without hesitation “if there is a greater chance the momentum for hitting its price target is lost.”

The language was identical to what BoJ Governor Haruhiko Kuroda has recently said, in talking about the need to keep the economy on track to achieve the BoJ’s price goal.

“The main point of today’s decision was the statement’s new line on the BoJ’s readiness to ease,” which is similar to the European Central Bank’s pledge to cut rates if necessary, said Hiroshi Shiraishi, senior economist at BNP Paribas Securities.

“While other central banks are heading toward additional easing, the BoJ felt the need to signal its easing bias to prevent an unwelcome spike in the yen.”

The decision on maintaining its interest rate targets was made by a 7-2 vote, with board members Goushi Kataoka and Yutaka Harada dissenting. Kataoka said the BoJ should ease further by cutting its short term rate target.

Kuroda was scheduled to hold a news conference at 3:30 p.m. (0630 GMT) to discuss the decision.

STRONG DOWNSIDE RISKS
In a quarterly review of its long-term projections, the BoJ slightly trimmed its inflation forecasts for the current fiscal year ending in March 2020, and the following year.

While maintaining its view that Japan’s economy was likely to continue expanding, the BoJ warned of strong risks such as global uncertainties and soft inflation expectations.

“The momentum for achieving 2% inflation is sustained, but lacks strength,” the BoJ said in a quarterly report on the economic and price outlook.

The European Central Bank last week all but cemented market expectations for a September rate cut, while the US Federal Reserve is seen cutting its policy rate by a quarter of a percentage point on Wednesday.

Easing by other major central banks is raising worries of a jump in the yen that could further strain Japanese exporters.

But years of near-zero rates have hurt financial institutions’ profits by narrowing their margin, leaving the BoJ with few tools to fight the next recession, let alone ramp up steps to accelerate inflation to its 2% target.

Japan’s annual core consumer inflation stood at 0.6% in June, the slowest pace in about two years.

Weak exports have also cast doubt on the BoJ’s view that an expected pick-up in overseas demand in the second half of this year will ease the pain on the economy from a scheduled sales tax hike in October.

Data earlier on Tuesday showed Japan’s factory output tumbled the most in nearly 1-1/2-years in June, adding to a slew of indicators suggesting slowing global growth was taking a toll on the export-reliant economy.

Many analysts expect yen moves to be among key triggers for further BoJ easing.

“The BoJ probably wanted to save its ammunition because the yen wasn’t rising much,” said Hiroaki Mutou, chief economist at Tokai Tokyo Research Institute.

“If Fed moves trigger yen rises, the BoJ could either strengthen forward guidance, allow 10-year bond yields to move in a wider band, or do both,” he said.

The yen was little changed versus the dollar on Tuesday after the BoJ announcement, trading near a three-week low. — Reuters

Botong’s mural is not lost — it is safe at the museum

IN 1968, Manila City Mayor Antonio J. Villegas commissioned a painting from National Artist Carlos “Botong” Francisco. The result was Filipino Struggles Through History, composed of a series of four paintings, for the Manila City Hall. The huge mural depicts significant events in the country’s history — from the great Rajahs who ruled Tondo to events in the American period. The artist finished what was to be among his greatest artworks shortly before he died on March 31, 1969. In 1996, the mural was declared a National Cultural Treasure by then National Museum director Gabriel S. Casal.

Earlier this month, former Manila mayor and Buhay partylist representative José Livioko “Lito” Atienza, Jr. called for a congressional inquiry on the “disappearance” of the Filipino Struggles Through History from the walls of the city hall’s Bulwagang Antonio J. Villegas. The former Manila city mayor demanded the return of the artwork after noticing that the original work had been replaced by a “poor tarpaulin replica” during the inauguration of Mayor Francisco “Isko” Moreno Domagoso on June 30.

But the mural had not disappeared. It was right across the street.

RESTORATION AND EXHIBITION
Over the years, the mural had suffered extensive damage due to a plumbing problem in city hall. In 2013, former Manila Mayor Alfredo S. Lim requested that it undergo restoration under the supervision of the National Museum, with funding for the project coming from the Tourism Infrastructure and Enterprise Zone Authority.

After the restoration was completed in 2015, the masterpiece was put on public view at the Senate Session Hall of the National Museum of Fine Arts in February 2018. The museum is right across Taft Avenue from Manila City Hall.

According to a post dated Feb. 15, 2018 on the National Museum’s Facebook page, an approved landmark agreement was made in 2017 by former Mayor Joseph Erjercito Estrada and the Manila City Council which allowed “the original paintings to remain at the National Museum for enhanced public access and appreciation.”

WHEREABOUTS NOT A MYSTERY
National Museum Director Jeremy Barns doubts that Mr. Atienza is unaware of the mural’s current location.

“Definitely, he (Mr. Atienza) knows that the painting has been with the National Museum since 2013 because his son, Ali Atienza, came to check to make sure it was there,” Mr. Barns told BusinessWorld, at the sidelines of the general assembly of the Museum Foundation of the Philippines, Inc. on July 25 at the National Museum for Natural History.

A 2013 post on the National Museum’s Facebook page stated: “[Manila] Councilor Ali Atienza visited the National Museum yesterday to inspect the conservation work on the 10-panel painting of Carlos ‘Botong’ Francisco’s Struggles of Filipinos Through History (1968).” The post also stated that the younger Mr. Atienza “was also supplied with the documents that enabled the temporary transfer of the 65-meter National Cultural Treasure painting to the NM while it goes through the process of making them last beyond our lifetime.”

“The fundamentals have always been there. Number one: the city of Manila owns the painting. Number two: as long as it’s with the National Museum, we are acting as its trustee for the city of Manila. We are the custodian of the painting on their behalf. It takes a lot of work to make sure that the painting stays safe and secure,” Mr. Barns affirmed.

Mr. Barns added that the former mayor’s claims that the transfer of the mural was “illegal” is without basis. “We started [the restoration] with mayor [Alfredo] Lim. Then when mayor [Joseph] Estrada came in, we had to explain it to him. So now mayor Isko [Moreno] came in, we explained it to him.”

According to news reports last week, current Manila City Mayor Francisco “Isko” Moreno Domagoso supports Mr. Atienza’s call to return the mural to the Manila City Hall.

“I am calling the NHCP, NCCA, isoli niyo ’yong Botong Francisco sa City of Manila. Maliwanag pa sa sikat ng araw ’yon. Amin ’yon. Taga-Maynila ’yon (I am calling on the National Historical Commission of the Philippines, National Commission for Culture and the Arts, return the Botong Francisco to the City of Manila. It is clearer than sunlight. It is ours. It is from Manila),” Mr. Domagoso said.

On July 22, Mr. Domagoso held a discussion with cultural agencies officials regarding the protection of the Manila’s cultural heritage.

“At the meeting I assured the [current] mayor (Mr. Domagoso) that we had an understanding with former mayor (Joseph) Estrada, and that [there is] no problem to come to a new understanding under [his] leadership,” said Mr. Barns.

According to the museum director, the landmark agreement on the mural’s public exhibition runs until 2022. “They (Manila City Hall) will be the first to install it there when the time and conditions are right because it really belongs to them,” he said.

“As I told the mayor, we can re-open everything, no problem. We respect his position and leadership. We are one with him in trying to bring back the pride and glory of Manila as our premiere cultural city,” Mr. Barns said, referring to the aim of focusing on the promotion of arts and cultural heritage in Manila. “We hope to do so many things with his administration. And I do not want this to dominate our agenda.”

“The last thing we want at the museum is to treat a National Cultural Treasure like some kind of football, rather than working together and have it transcend and become a national symbol that unites Filipinos.” he said. — Michelle Anne P. Soliman

MPIC eyes issuance of exchangeable bonds

METRO PACIFIC Investments Corp. (MPIC) is planning to issue exchangeable bonds in the coming months as it prepares the initial public offering (IPO) of its health care holding firm Metro Pacific Hospital Holdings, Inc. (MPHHI), its chairman said.

“The process has started for the hospitals,” MPIC Chairman Manuel V. Pangilinan told reporters, adding that a public listing is the “correct” direction for the business segment.

“I think we will eventually put it to bed, the IPO, hindi ko lang alam talaga kung ano’ng (I really don’t know) whether the schedule is firm enough that we can conclude it within the year,” he added.

MPIC’s health care segment includes operations and management of hospitals and nursing colleges and related enterprises under MPHHI and subsidiaries.

“We’re thinking of perhaps to be certain that we can raise the funds for MPIC and for the hospitals itself that maybe we should issue an exchangeable bond within the next two to three months that is convertible directly to the hospitals, to the hospital holding company,” he added.

An exchangeable bond consists of a straight bond and an option to swap the bond for the stock of the a company other than the issuer (for instance, the issuer’s subsidiary or affiliate) at a future date and under certain conditions.

Mr. Pangilinan said the size of the bond issuance would be around the same as the target proceeds of the IPO, which he did not disclose.

“Depends on what the estimated IPO proceeds are. So it’s got to be at some broad estimate. So that’s the size. It would be the same people who would buy the exchangeable [bonds] because what we are looking at is a mandatory exchange into MPHHI shares at pre-determined ratio,” he said.

Mr. Pangilinan said there was no update on The Medical City, which he described early this year “the last remaining major hospital in Metro Manila” for acquisition. He previously said that he had talked to the two camps disputing ownership of the hospital.

“We have not followed that up. I think the hospitals group is very busy with expanding in respect of hospitals, existing hospitals other than Medical City and with this IPO, the IPO fundraising (for MPIC),” he said.

MPIC’s hospital group comprises of full-service hospitals and a mall-based diagnostic and surgical center. It is the largest private provider of premier hospital services in the Philippines.

MPHHI is developing the Philippines’ first nationwide chain of hospitals to deliver comprehensive in-patient and out-patient hospital services, including medical and surgical services, diagnostic, therapeutic intensive care, research and training facilities in strategic locations.

Within its portfolio, eight are in Metro Manila: Makati Medical Center, Cardinal Santos Medical Center, Our Lady of Lourdes Hospital, Asian Hospital, De Los Santos Medical Center, Manila Doctors Hospital, Marikina Valley Medical Center Inc., and Dr. Jesus C. Delgado Memorial Hospital.

In other parts of the country, it has interest in Davao Doctors Hospital, Riverside Medical Center in Bacolod, Central Luzon Doctors Hospital in Tarlac, West Metro Medical Center in Zamboanga, Sacred Heart Hospital of Malolos, Inc. in Bulacan and St. Elizabeth Hospital, Inc. in General Santos City.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon