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An appeal to Congress to pass CREATE

Thirty one leading business groups including the prestigious Financial Executives Institute of the Philippines (FINEX), the Management Association of the Philippines (MAP), the Philippine Chamber of Commerce and Industry (PCCI), GoNegosyo, and the Chambers of Commerce from the Americas and Europe recently signed a manifesto expressing their support for the passage of the Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE Law.

CREATE replaces CITIRA (Corporate Income Tax and Incentives Reform Act), the second tranche of tax reforms that has been stalled in the Senate for more than six months. It is vital that CREATE passes both Congress and the Senate before they go on recess on the sixth of June. The country’s economic future depends on it.

CREATE was crafted to save businesses in distress, stimulate the economy, and restore growth following the onslaught of the Wuhan virus. It is also designed to make the country more competitive in attracting the foreign direct investment (FDIs) we badly need.

As Finance Secretary Sonny Dominguez puts it, CREATE is the first ever revenue-eroding tax reform package proposed by the Department of Finance. In other words, instead of proposing more taxes and/or higher tax rates, CREATE aims to reduce it. With its passage, the government will forgo P625 billion in annual revenues and instead put these funds in the hands of the private sector. It is an expression of trust on the government’s part towards the private sector as it relies on the latter to use the tax savings to expand and create jobs.

CREATE is composed of four components.

The first is the immediate cut of corporate income tax from 30% to 25% starting July. The one-time 5% cut will be followed by an annual cut of one percent from 2023 to 2027. Not only will this relieve Filipino corporations of its heavy tax burden, it will also put the Philippines in step with the corporate income tax rates of our regional neighbors.

The standard corporate income tax rate in Singapore is 17%, it is 20% in Vietnam and Thailand, and 24% in Indonesia. One can understand why foreign investors shy away from the Philippines with our 30% tax rate. CREATE will even the playing field and make us more competitive.

The second component is to maintain, for a period of nine years, the tax rate of 5%-of-gross-income for companies already operating in the Philippines. This is meant to dissuade investors from leaving our shores whilst other incentives are rationalized.

The third component is to extend the applicable years to carryover net operating loss, from three to five years.

Small businesses are among the most severely hit by this pandemic and will surely book massive losses this year. This provision allows them to carry over the losses, thus lowering their tax obligations for the next five years. Small businesses can use their tax savings for re-investment.

The fourth component is to make our tax system more flexible by allowing the Fiscal Incentives Review Board (FIRB) to recommend to the President the grant of longer incentives and additional non-fiscal incentives for desirable foreign investors.

Secretary Dominguez made a very good point. He asserts that the Philippines has offered generous tax incentives to potential investors for 40 years, yet, has always had the least share of FDI among ASEAN-6. It is about time we accept that this one-size-fits-all approach does not work.

What the good secretary proposes is a one-on-one approach whereby our Investment Promotions Agencies speak to particular companies who are strategic to us. With flexibility in fiscal and non-fiscal incentives, we can tailor-fit the package of incentives to one that is most meaningful to them. We will have a higher probability of bagging investors this way.

What constitutes a strategic investor? It is one that offers pioneering technology, one that promises recurring and substantial export earnings, one that offers massive employment opportunities.

This law is critical especially since we have stiff competition to attract manufacturing companies leaving China. At least 2,000 companies from America, Japan, Korea, and the European Union are leaving China mainly for three reasons: 1.) To release their supply chains from dependence on the communist republic; 2.) Because of rising costs (labor and rent) and stricter environmental laws; and, 3.) As retaliation for not being forthright and withholding information on the lethality of the Wuhan virus during the first months of the outbreak.

I cannot overstate the urgency of implementing this tailor-fit approach to attract FDIs. Last week, Japanese Chamber of Commerce, Inc. estimated there could be at least 300 Japanese companies leaving China and the first choice of country to relocate to is Thailand at 28%, then Vietnam at 22%, then some to either Malaysia and Indonesia. No company said they would relocate to the Philippines. Instead, some of the 300 Japanese companies who have manufacturing bases in the Philippines may leave to consolidate their manufacturing in their new sites. This is aside from the US companies who have already left China but did not relocate to their oldest friend in Asia but instead went mostly to Vietnam.

Attracting FDIs is a high priority since we must generate jobs for nearly 3 million displaced Filipinos (possibly 6 million by July) and half a million returning OFWs. We need FDIs to hasten our transition from being a consumer-driven economy, which will only take us so far, to one that is led by production.

CREATE is a law that is long overdue. We could not enact it before because the government’s revenue collection ratio (vs. GDP) was low and to reduce tax rates would further starve the government of funds. But thanks to the TRAIN law, the revenues to GDP ratio has improved to an all time high of 16.1% (as of end 2019). We can now afford to enact this long-overdue tax reform.

I applaud the Department of Finance for coming-up with CREATE. It is a bold law that will forever change the business landscape of the country. It will have a profound effect on our economic future as we move forward.

I urge Congress and the Senate to please pass the CREATE bill before you go on break. We need this bill to help Filipino companies survive, revive the economy, and attract our fair share of FDIs. I, along with 31 business groups make this urgent appeal.

 

Andrew J. Masigan is an economist

Is it the end of the world as we know it?

I am pleased to share with readers excerpts from a recent report and Zoom forum appearance connected with, what else, coping with COVID-19.

Following is the executive Summary of the May 26 quarterly outlook report that Christine Tang and I wrote for subscribers of GlobalSource Partners (globalsourcepartners.com) called “Is it the end of the world as we know it?”

Only a handful of countries can claim to have been prepared for the COVID-19 pandemic. The Philippines is not one of them. When local transmission began, the government resorted to the only tool it had to contain the outbreak: the lockdown hammer. It used this to close government and business, offices and schools, and even public transport. The economic cost was enormous, at P1.1 trillion, or 5.6% of GDP, for the 45-day lockdown.

In this time of extreme uncertainty, when past data offer little guidance for the future, and policy responses are evolving quickly, forecasting becomes even more of an art than science. For this forecast exercise, we started with the Q2 lockdown, then visualized the economy under a “new normal,” and likely outcomes from government efforts to avoid a second wave of infections on one hand, and to revive the economy on the other.

The outlook is quite grim: a sharp contraction of 7% this year, with GDP not expected to rebound before 2022. Indeed, with masking directives, distancing protocols, borders closed, and police checkpoints everywhere, the hit R.E.M. song from the 1980s (“It’s the End of the World as We Know It”) continually replays in our heads.

We have been seeing a lot of a chart from the Economist, showing the Philippines ranking 6th among 66 emerging market economies in terms of public debt, foreign debt, cost of borrowing, and reserve cover. The assumption has been that the government has the fiscal space to do whatever it takes to counteract a recession. Yet fiscal authorities have been quite restrained on the subject of fiscal stimulus. Indeed, fiscal authorities have a tough balancing act ahead. What they choose to do — and we think they have room to maneuver — will matter greatly for how well the economy will emerge from this crisis.

It appears that even President Rodrigo Duterte is suffering from lockdown fatigue. As soon as the ECQ in Metro Manila was “modified” to let some businesses partly reopen, he invoked presidential exemption and flew home to Davao. Indeed, nobody expected the ECQ to last this long, nor how slow the government would be to ramp up infection testing. We have had no word on how the pandemic may have affected Duterte’s approval ratings, but we may expect them to follow economic and social indicators. The deeper and longer the economic downturn, the greater the risk of more populist measures, and fear of a lame-duck presidency. Indeed, political analysts say the constant presence of Senator Christopher Go at the president’s side during his regular COVID-19 press briefings is a sign that succession planning is ever on the president’s mind.

Following are my remarks as a reactor in a Stratbase Zoom roundtable on PPP post COVID-19, held on May 29.

In a book titled Momentum that Toti Chikiamco and I co-wrote with three others friends last year — Dondon Paderanga, Raul Fabella and Noel de Dios — a number of our old columns talked about PPP (public-private partnership) and the circumstances under which it is the ideal mode for project development and implementation. I was delighted to see that one of my columns there was posted by former PPP Center chief Phil (Pecson) or perhaps earlier by predecessor Cosette (Canilao) in the PPP Center site. The title of the column is “The Great Infrastructure Debate.” (You can read it at https://ppp.gov.ph/in_the_news/the-great-infrastructure-debate/ or you can get a copy of our book published by FEF.)

It talks about the pros and cons of PPP vs using the GAA and concludes that “given the huge infrastructure requirements of the Philippines it should not be PPP versus ODA but rather PPP AND ODA”

I further noted that “the lively debate may have been driven by the sudden change in public policy, yanking without compelling reasons several projects at advanced stages of preparation to an ODA or tax funded mode after these have been prepared for a PPP bid over many years. This has raised concerns over the consistency and stability of government policies from many capable local and global players who have invested substantial resources to bid for these. Included in these are five regional airports and Kaliwa Dam.”

Had the administration pursued these projects, these would likely have already been completed and serving the public. Especially the much-delayed bulk water project.

But that is water under the bridge, pardon the pun, and we need to move on. And as a policy advocate, like Stratbase guys, I believe that we should “never let a good crisis go to waste.” What is possible to do in the remaining time?

This is what I wrote in a column last week as one among key reforms that can be done for the third phase of PROGRESO, the recovery “bounce back” phase.

“More reliance on PPP, including bringing to the finish line projects that have been under protracted negotiations. This can help rebuild damaged investor confidence. It will also help conserve now stretched fiscal resources. Government also needs to assure stability in regulation for existing PPP and enact the long pending PPP bill in Congress.”

This will also build on the working public-private partnership now taking place in coping with this crisis, most notably in the 3 T program — testing, tracing and treatment — and in helping the most vulnerable members of society cope. Something no less than the President acknowledged warmly, including with unexpected kind apologies.

Senator Grace Poe, Congressman Edgar Sarmiento, and FEF President Toti Chikiamco identified good candidates for future PPP reform and collaboration:

1) In the area of mass public transportation: PUV service contracting, and public infrastructure to support the same.

2) Open up the economy to more competition in PPP by amending the outdated Public Services Act and passing the long delayed PPP bill.

3) Bid out public health projects in various regions for services based on outcomes.

Let me also add:

4) Water projects are one of the most cost-effective public health interventions governments in developing countries can do. Peso for peso, I bet it can save more lives from prevention of deaths of common water borne diseases — dysentery, gastroenteritis, schistosomiasis, cholera, etc., vs other public health interventions, eg. the high economic cost of lockdowns to prevent mortality from COVID-19.

Incidentally, handwashing, the most potent tool vs COVID-19 together with wearing face masks, is only possible if there is water.

In this connection, I end with a wish that the limbo state of affairs in which the MWSS Water Concessions are trapped with the setting aside of the international arbitral award due to idiosyncratic regulation of an earlier administration, is sorted out soonest. This will send a clear signal, especially at this time, that the Philippines is open for investments. And that the concessionaires can continue to provide us with affordable, secure water service as they have been doing for over two decades. Something that could not be delivered by MWSS pre-PPP.

You will forgive my bias since I was involved in it as Undersecretary of the Department of Finance with oversight for Privatization in 1996. MWSS privatization, in my view, remains the best infra PPP case in terms of service delivery and mobilization of financial capital (debt and equity). Concessionaires achieved these outcomes due to their performance anchored on a credible concession contract which is now being reviewed.

 

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos administrations.

romeo.lopez.bernardo@gmail.com

Philippine private education: Possible liabilities in the post-lockdown era

By George Matthew T. Habacon

THE Department of Education (DepEd) has issued guidelines relating to the opening of classes after the lifting of the quarantines. While there are ongoing debates as to the efficacy of these restrictions, inevitably schools need to adjust to survive. Let us examine certain problem areas in the operation of private educational institutions post-lockdown.

FACE-TO FACE CLASSES: HEALTH RISKS AND LIABILITY FOR INFECTION
The guidelines prohibit face-to-face classes earlier than Aug. 24, and from then on, face-to-face classes may be conducted only in areas allowed to open physically.

Institutions must also comply with minimum health standards that will be issued by the DepEd, consistent with guidelines of the Department of Health, the Inter-Agency Task Force for the Management of Emerging Infectious Diseases, and the Office of the President.

When a school opens classes and conducts face-to-face classes, students and faculty members are exposed to the risk of being infected by the COVID-19 virus considering that the disease is supposedly easily transmitted through physical contact between persons.

One important question is: If they do get infected, can the students and faculty members hold the school liable?

While there is no specific law yet addressing such a novel situation, the infected students and faculty members might raise the issue of negligence under our law on Quasi-Delicts. Under the pertinent Civil Code provisions on quasi-delict, as well as relevant jurisprudence, whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. In order to establish a right to recover, the claimant must establish by competent evidence the following: 1.) Damage to him or her; 2.) Negligence by act or omission of which defendant personally or some person for whose acts it must respond, was guilty; and, 3.) the Connection of cause and effect between the negligence and the damage.

Proving the first and second element is relatively an easier task as these are generally demonstrable facts. Proving the causal connection is a more difficult task. Although this virus is contagious, the contagion period remains to be determined. Recent findings showed that it is contagious even in the incubation period when the patient shows no symptoms. The virus also survives on surfaces for different time periods adding to the incident of transmission. Thus, determining accurately where a person has acquired the virus may be scientifically improbable.

Private school teachers and staff who are registered with the Social Security System (SSS) may try to claim through the existing Employees’ Compensation Program (ECP), a government program designed to provide a compensation package to public and private employees or their dependents in the event of work-related sickness, injury or death. They would need to prove that the disease is included in the occupational diseases covered by ECP.

In employee compensation cases, the claimant must adduce reasonable proof between the work of the deceased and the cause of his death, or that the risk of contracting the disease was increased by the deceased’s working conditions.

ONLINE CLASSES: ACCESSIBILITY TO EDUCATION AND POTENTIAL LOSS OF EMPLOYMENT FOR TEACHERS
Consistent with the principle of preventing infections through elimination of physical contact and interactions among persons, some experts in the field of medicine and education as well as policymakers have strongly pushed for the conduct of online classes. While this may be beneficial to some, it also puts students who have limited, faulty, or no internet access at all at a harsh disadvantage. Thus, can these students and their parents sue a school which conducts classes online exclusively?

This is arguable. The Constitution expressly provides that the State shall protect and promote the right of all citizens to quality education at all levels, and shall take appropriate steps to make such education accessible to all. Hence, a school which exclusively conducts classes online might be violating this constitutional right because as technologically savvy as present Philippine society might seem, a great number of Filipinos still do not have the means to the technology and facilities needed for the conduct of online classes.

However, this is different in the case of private schools. When education is delivered in private institutions, a contractual relationship is created between the students/parents and the schools where both parties have certain rights and obligations. A student or, in reality, a parent is free to choose which school to enroll in, bearing in mind the rules, regulations, and manner of instruction that a private school may impose.

Another possible consequence of conducting online classes exclusively is loss of employment for teachers. In the conduct of online classes, fewer teachers are required because classes can be viewed simultaneously online. Thus, in a scenario where several teaching personnel are laid off due to the existing demands and circumstances of education, can the school be held liable for illegal termination?

The scenario contemplated above is akin to the concept of Redundancy under our Labor Code. Redundancy exists when the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Philippine jurisprudence further instructs us that a declaration of redundancy is ultimately a management decision in exercising its business judgment, and the employer is not obligated to keep in its payroll more employees than are needed for its day to-day operations, provided there is actual basis for the declaration and certain procedures are followed.

Being one of the authorized causes for termination of employment under Art. 298 of the Labor Code, a termination of a teacher’s employment due to redundancy is valid provided that the school complies with certain jurisprudential requirements i.e. 1.) written notices requirements; 2.) payment of proper separation pay; 3.) good faith in abolishing the redundant positions; and, 4.) fair and reasonable criteria in ascertaining what positions are to be declared redundant.

CONCLUSION
It is important to note that the World Health Organization (WHO) has stated that “deciding to close, partially close or reopen schools should be guided by a risk-based approach to maximize the educational and health benefit for students, teachers, staff, and the wider community, and help prevent a new outbreak of COVID-19 in the community.”

Perhaps it is equally important to determine if the guidelines issued by our government are responsive to the mandate issued by the WHO than just determining if these guidelines stop the spread of the virus. At the end of the day, there is sufficient basis for a private educational institution to open its doors for as long as it complies with minimum health standards. Private educational institutions must prioritize the health of its students and staff without jeopardizing its students’ right to quality education.

 

George Matthew T. Habacon is a Partner in Garcia Habacon and Han Law. He primarily handles corporate and commercial matters, commercial arbitration, as well as labor and employment matters. He is currently a lecturer at the University of Asia and the Pacific teaching Conflicts of Law.

Discounts granted to national athletes, coaches welcomed

SEEING the value of recognizing the efforts of national athletes and coaches in bringing pride and honor to the country, the Bureau of International Revenue on May 27 issued implementing regulations that provide a 20% discount in the purchase of goods and services to the former, something local sports stakeholders welcomed with open arms.

Signed by Finance Secretary Carlos Dominguez III on the recommendation of Internal Revenue Commissioner Caesar Dulay, Revenue Regulations (R.R) No. 13-2020 spur further implementation of Republic Act (R.A.) 10699, the law expanding the coverage of incentives granted to national athletes and coaches.

Under R.R. 13-2020, qualified beneficiaries will be entitled to a 20% discount on goods and services, similar to those given to senior citizens and persons with disabilities.

In turn, “business establishments granting sales discounts to national athletes and coaches on their sale of goods and/or services shall be entitled to deduct the said sales discount from their gross income,” the recently released regulation reads.

Qualified beneficiaries are those who compete in international sports competitions which do not grant prize money and must be duly recognized and accredited by the Philippine Sports Commission (PSC), the Philippine Olympic Committee (POC), the Philippine Paralympic Committee and the National Sports Associations.

The law provides discounts to national team members in the purchase of goods and services like food, medicine and sports equipment. It also grants deduction on transportation fares, room accommodations, restaurants, recreation centers, cinemas, and other amusement areas.

To ensure that such regulation is enjoyed fully by the beneficiaries, the chairman of the PSC is asked to issue a Philippine National Sports Team Identification Card and Booklet (PNSTM ID and Booklet) to the national athletes and coaches.

Benefits and privileges may be availed of by those who are qualified upon presentation of these PNSTM IDs and booklets to privately owned establishments.

The regulation will take effect 15 days after publication in the official gazette or any two nationally circulated newspapers.

The law imposes penalties of up to six years in jail and a fine of P200,000 on those caught in violation.

WELCOME DEVELOPMENT
As expected, local sports stakeholders welcome the development, looking at it as long overdue to be fully implemented.

“I am happy for our national athletes and coaches that the BIR has finally approved the implementation of this law. This will be an added incentive for our athletes and coaches who bring honor and pride to our country,” said PSC Commissioner Ramon Fernandez in an interview.

While the 20% discount for national team members was already in R.A. 10699, it was not being fully implemented, pushing athletes and officials to work hard for the strict implementation of such privilege, gaining headway in it by crafting pertinent guidelines in coordination with the BIR last year.

The release of the regulation comes at the most opportune of time as the PSC is set to slash the monthly allowance of athletes as a result of the budget cut the agency absorbed with the government making adjustments because of the impact of the coronavirus disease 2019 (COVID-19) pandemic.

“Well, of course, they should be very happy with this,” said Mr. Fernandez, believing that it could somehow cushion the impact of the cut in the monthly stipend of national team members.

He went on to say that the PSC remains committed to looking after the welfare of the athletes in these trying times.

For bemedalled triathlete and POC Athletes’ Commission officer Nikko Huelgas, the release of R.R. No. 13-2020 was a step in the right direction and about time since the proper implementation of the discount privilege has been a going concern among their ranks.

“I’m very happy to see the IRR (implementing rules and regulations) being acknowledged more and more by people from the top where they can greatly influence the [business] establishments in acknowledging this more,” said the two-time Southeast Asian Games gold medallist in a separate interview.

“Yes it (discount privilege) was [a concern] and until now. I understand that it takes time to implement such but with more awareness we can reach our goal. We will wait for the PSC to issue the booklets in addition to our new 2020 PSC IDs. It will make things easier. It’s a big stepping stone and I hope more support will come as the years go by,” he added.

And it is not only the athletes and officials who welcome it as seemingly businesses are open to the newly released regulation.

One of these is Fitspiration Philippines Corp., the company handling Gold’s Gym Philippines and UFC GYM Philippines.

“It’s a good idea. It doesn’t really have much effect on us because we even sponsor most of them. Hence if we were willing to give them our services for free then letting go of 20% is definitely something we support,” said Mylene Mendoza-Dayrit, CEO of Fitspiration. — Michael Angelo S. Murillo

Austria gives nod to F1 races without a crowd

ZURICH — Formula One can start its season in Austria with two races behind closed doors on July 5 and 12, the country’s health ministry said on Saturday.

The delayed championship, which was due to get going in Australia in March, has had to cancel or postpone a string of races — including the Monaco highlight — due to the COVID-19 pandemic.

The Austrian grand prix circuit, the scenic Red Bull Ring owned by the energy drink brand, is near the village of Spielberg about 200 km (124 miles) southwest of the capital Vienna.

Formula One is expected to publish a revamped calendar this week with a race in neighboring Hungary, also without spectators, following on from Austria.

Two races will then follow at Silverstone in Britain, with Hockenheim in Germany an alternative if quarantine conditions are an obstacle, with further rounds in Spain, Belgium and Italy.

The sport has said it hopes to do between 15–18 races, a reduction from the originally scheduled record 22, ending the season in Abu Dhabi in December after visiting Asia and the Americas.

Austria is among countries moving ahead with easing restrictions as coronavirus infections wane.

Formula One’s 10 teams will be limited to a maximum 80 people each at the races when the delayed season gets going in July, the governing International Automobile Federation had said on Thursday.

The numbers are likely still to exceed 1,000 with support series and marshals, medical staff and others also to be factored in.

The Austrian event organizers presented a comprehensive, professional security concept to prevent infections, the country’s health ministry said on its Website.

“The concept calls for strict hygienic measures as well as regular tests and health checks for the teams and their employees,” Health Minister Rudolf Anschober said. — Reuters

Burns dominates Woodley at UFC Fight Night

THE ULTIMATE Fighting Championship staged another live event on Sunday (Manila time) that saw Brazilian Gilbert Burns dominating American Tyron “The Chosen One” Woodley in five rounds of their headlining welterweight fight in Las Vegas.

Held at the UFC Apex Facility, “UFC Fight Night: Woodley vs. Burns” was a continuation of UFC’s efforts to move forward amid concerns over the coronavirus disease 2019 (COVID-19) pandemic.

It was the fourth event of the promotion in May after taking some time off because of the highly contagious COVID-19, which has already claimed at least 105,000 lives in the United States alone to date.

Mr. Burns was on top of things right from the opening bell en route to a convincing 50-45, 50-44 and 50-44 unanimous decision victory.

“Durinho,” as Mr. Burns is referred to, was on top of things, nearly finishing former champion Woodley in the opening round after dropping the latter on the mat and punishing him with a flurry of strikes.

Mr. Woodley was able to survive the onslaught but not after absorbing much damage, including having his left eyebrow busted open.

The Brazilian contender continued to pile up the pressure on Mr. Woodley the rest of the way, with a variety of punches and kicks, something the latter had a hard time keeping in step with.

Sensing that he got the fight in the bag, Mr. Burns tried to go for a stoppage finish in the fifth and final round but none would come as Mr. Woodley managed to hold on till the end.

With the win, 33-year-old Burns improved to 19 wins, including winning six straight, as oppose to three losses.

He expressed hope after the fight that the UFC would give a shot at the welterweight title currently held by Kamru Usman of Nigeria.

Mr. Woodley, with the loss, dropped his second straight match and fell to a record of 19-5-1.

Next for the UFC is “UFC 250” on June 6, to be headlined by the title clash between reigning women’s featherweight champion Amanda Nunes against challenger Felicia Spencer. — Michael Angelo S. Murillo

Volleyball community continues to step up and help amid COVID-19

VOLLEYBALL Community Gives Back PH (VCGB PH ) has something to serve up for those matchday personnel affected by the coronavirus disease 2019 (COVID-19) pandemic.

Charo Soriano, one of the VCGB PH leaders, is looking forward to two memorable fun days from the sport’s biggest stars through the SERVE AS ONE Variety Show.

A fundraising effort for volleyball personnel presented by Volleyball Community Gives Back PH, the show is scheduled on June 5 and 6, 7:30 p.m. on the ABS-CBN Sports Website, ABS-CBN Sports Facebook Page and ABS-CBN Sports Youtube Channel.

“Time and time again, the Philippine volleyball community has exemplified solidarity in the face of various adversities — from community development, natural disaster responses, relief operations and more recently, distribution of PPEs to different provinces. Everyone helps out. And people — players, coaches, management, staff, officials, and fans — all do their part,” said Ms. Soriano.

Last month, the #CARINGFORALL: Down The Line, We Are One was launched to provide assistance for the paid-per-day personnel, as any help will go a long way.

As of last Friday, VCGB PH was able to provide 200 care packs to volleyball personnel all over Metro Manila. The group hopes to raise funds and provide care packs to be distributed for more volleyball personnel families affected by the postponement and cancellation of volleyball leagues.

And further help is on the way with the SERVE AS ONE Variety Show, with the people behind it expressing readiness and hope it would be a success.

“We wanted to reach out and help our volleyball personnel and staff and all those who made our games possible — bouncers, ball retrievers, referees, technicians all those whose livelihoods have been threatened due to COVID-19 so we came up with the idea of putting up the SERVE AS ONE Variety Show. All proceeds will go to the care packages for their families,” said Kiwi Ahomiro, who recently lent her hand in delivering personal protective equipment (PPEs) to the Philippine Army.

Also taking part in the drive is Amanda Villanueva, who hopes that the help will go a long way to boost the spirits of the volleyball game’s unsung heroes.

“In these trying times my main motivation in helping our dearest group of volleyball personnel is the vision of hope that everything will eventually come to an end. To let them know as well that we are in this together and that nobody gets left behind in life whichever direction life leads us because we are one community and we strive to help each other in whatever way we can. To stand together as one family not just on the court but also outside of the court,” said Ms. Villanueva.

Donations can be sent to Ryan Sordan through BPI bank account 8069 0632 77, GCash at 0917-5003390 and PayMaya at 0917-5003390.

To know more about the initiative, visit Volleyball Community Give Back on Facebook and @vcgbph on Instagram and Twitter for more details.

Getting back

Make no mistake: Everything needs to go right before the United States Open can be held in September. It certainly doesn’t help that Winged Foot Golf Club lies smack dab in Westchester County, New York, among the areas in the United States most affected by the coronavirus disease 2019 pandemic. And even with state officials cautiously relaxing quarantine measures and, in fact, pushing for the resumption of sporting events, there is the not so insignificant hurdle of mobility. Ensuring the participation of the usual field of 156 players — who will be coming from any number of locations, including outside the country — presents unprecedented logistical concerns.

That said, US Golf Association heads bear more optimism now than early last month, when they moved the schedule from its traditional mid-June spot. Back then, holding the major tournament in abeyance looked to be a Hail Mary move; with the virus spreading fast and containment foremost in the minds of decision makers, resumption of any kind of competition was more a matter of if than when. These days, they’re confident not just of staging the Grand Slam stop, but of actually having spectators on site. In this regard, the outdoor sport lends well to physical distancing and other precautions aimed at ensuring an acceptable modicum of public health and safety.

No doubt, USGA honchos will be coordinating closely with state, local, and tour representatives. Parenthetically, they will see, and learn from, the experience of other event organizers; up first is the Charles Schwab Challenge at the Colonial Country Club in Forth Worth, Texas, next month, a veritable litmus test on how a new normal can be instituted. And, in the 13 other official events — including the PGA Championship — between then and the US Open, the hope is that continuous improvement in the conduct of tournaments occurs.

Needless to say, fans are all for the sport getting back on its feet; as the exceedingly high ratings of The Match: Champions for Charity last week underscored, they’re starving for competition. More importantly, the players themselves can’t wait to wield clubs anew; for the first time in 34 years, the Charles Schwab Challenge will be graced by the World Numbers One to Five. “Our field is deep,” event director Michael Tothe was quoted by the Fort Worth Star-Telegram as noting. “It’s really come together nicely.” Which is why the USGA believes the worst to be over, with the best about to come.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Globe continues to build its 5G network despite GCQ

As the country slowly works its way into the new normal, Globe remains steadfast in building its 5G network for launching in the coming weeks, following the transition of key areas from Modified Enhanced Community Quarantine to General Community Quarantine.

With the heightened role of digital connectivity and the internet during the quarantine period, Globe is aggressively pushing for the expansion of its 5G coverage, a highly anticipated mobile technology, in key areas in the metropolis, specifically in the Makati and Bonifacio Global City Central of Business Districts (CBDs).

After showcasing mobile 5G to select Platinum customers last February 2020, Globe is expected to make the service available to more Platinum and Postpaid mobile customers who are within 5G coverage areas in the coming weeks. The leading telecom provider is also slated to launch more affordable 5G-capable smartphones to the market soon, making the 5G experience progressively accessible to more mobile customers. In its bid to also make 5G more relevant, its eyeing to launch more ways for consumers to enjoy 5G not just with faster data speeds but with newer forms of technology like augmented and virtual reality.

“Globe is doing this in solidarity with Filipinos who are on their way to getting back on their feet. In response to what seems to be increased dependence on digital among our mobile customers, we want to make the 5G experience progressively available to more of our mobile customers at the soonest possible time. As we all look forward to better days, 5G will definitely hasten the digital transformation in the country as businesses, the government, and its people move towards digitalization.,” said Albert De Larrazabal, Globe’s Chief Commercial Officer.

Globe is the first telco in the country to introduce 5G technology in 2019 when it launched AirFiber for its broadband customers. It’s also the first company to offer the first 5G capable smartphone in the Philippines early this year. Globe is also the first telecom provider to do a 5G video call in the country after it completed a three-minute 5G call with AIS, a leading mobile operator in Thailand, from Bangkok also early this year.

 

S&P affirms Philippines’ rating

S&P Global Ratings maintained its BBB+ long-term credit rating for the Philippines with a stable outlook, as it expects the economy to bounce back next year after the coronavirus crisis.

“The Philippines’ economy should achieve a strong recovery from 2021, following a deep slowdown due to the COVID-19 (coronavirus disease 2019) pandemic this year. Although the country’s fiscal and debt settings will deteriorate due to the COVID-19 stimulus measures, the government’s long track record of fiscal prudence provides some buffer, assuming a meaningful stabilization begins in 2021,” the global debt watcher said in a statement on Saturday.

The country’s BBB+ rating from S&P – which is a step closer to the country’s targeted A rating – was given in April 2019.

The “stable” outlook suggests that the rating is likely to be maintained over the next six months to two years.

S&P has also affirmed its A-2 short-term credit rating for the Philippines.

“The ratings on the Philippines reflect our expectations that the economy will continue to achieve above-average growth over the medium term, which will drive constructive development outcomes and underpin broader credit metrics… The ratings are also supported by the economy’s sound external settings. These are weighed against the Philippines’ lower-middle-income economy,” it said.

According to the report, the country’s rating strength lies in its external position, the peso’s stability and the increase in the dollar reserves during the crisis.

S&P said it may upgrade the Philippines’ rating depending on how fast the economy recovers.

“We may raise the rating over the next two years if the economy recovers much more quickly than expected, and the government makes significant further achievements in its fiscal reform program, such that the net general government indebtedness falls below 30% of GDP (gross domestic product),” it said.

“We may also raise the rating if we believe the institutional settings that have contributed to the significant credit metric improvements over the past decade or so will persist,” it added.

However, S&P warned a downgrade is possible if the economy suffers a worse-than-expected and prolonged downturn.

In April, the debt watcher has lowered its GDP projection for the country this year to -2% from a baseline growth estimate of six percent in December. Meanwhile, it expects a nine percent expansion rate in 2021 which is higher than its 6.4% initial forecast.

S&P’s latest ratings actions followed Fitch Ratings’ lowered outlook in early May for the country to “stable” from the “positive” it gave in February. It has however maintained the country’s credit rating at BBB.

Meanwhile, Moody’s Investors Service has given a Baa2 rating with a stable outlook for the Philippines in December 2014.

STRONG FUNDAMENTALS

S&P said the Philippines is among the fastest growing in terms of 10-year weighted-average per capita, due to supportive policy dynamics and improving investment climate. It also noted the country’s declining unemployment rate prior to the pandemic.

But S&P flagged that uncertainty in export markets and a “modest, though improving” transport infrastructure as among the country’s major economic constraints.

“As such, ongoing work to close infrastructure gaps and improve the business climate through greater political stability and regulatory reforms should be supportive of economic productivity,” S&P said.

It also noted current proposals under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill will likely weigh on foreign direct investments over the near term.

“In our view, a deeper and more diversified financial and capital market would further boost the effectiveness of policy transmission and facilitate improved credit metrics,” it said.

Meanwhile, S&P said the Bangko Sentral ng Pilipinas’ measures so far to support growth and cushion the impact of the pandemic is “broadly neutral” ratings-wise as it shows the central bank’s record to manage inflation and history of independence.

Finance Secretary Carlos G. Dominguez III said the affirmation of the BBB+ rating is “an unequivocal recognition by S&P of the resilience of the Philippine economy to regain its high-growth trajectory in the new normal.”

“We are confident that our government’s four-pillar strategy to deal with the pandemic will see us through this global health emergency as we remain focused on saving lives and protecting communities while gradually lifting mobility restrictions to restart the economy and get people back to work,” Mr. Dominguez said. — Luz Wendy T. Noble

Quarantines relaxed nationwide on June 1

THE country will be transitioning into more relaxed lockdowns starting June 1, with fewer restrictions on people’s movement and more outdoor activities and physical reporting to work allowed.

Most areas in the Philippines will be placed under a modified general community quarantine (MGCQ) — the least strict lockdown level — the starting Monday, while Metro Manila, Davao City, Region 2 (Cagayan Valley), Region 3 (Central Luzon), Region 4-A (Calabarzon consisting of Cavite, Laguna, Batangas, Rizal, and Quezon), Pangasinan, and Albay will be placed under general community quarantine (GCQ).

The Omnibus Guidelines on the Implementation of Community Quarantine issued by the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF-EID) states that GCQ involves the imposition of temporary measures on movement of transportation, industries, and presence of uniformed personnel. However, this is less strict than the enhanced community quarantine (ECQ) which was originally imposed on Metro Manila and many parts of the Philippines and allowed only sectors delivering basic goods and services to operate and with public transportation prohibited.

MGCQ is also called the “transition to the normal,” with much fewer restrictions than GCQ.

In areas under GCQ, persons under the age of 21 and those 60 and above, and people who suffer from immunodeficiencies, or have comorbidities or other health risks, and pregnant women, are not allowed to leave their homes unless they are obtaining essential goods and services or have to go to work in permitted industries and offices. The same limitation is imposed on the people living with them. But under MGCQ, everyone is allowed to leave their residence.

The GCQ restrictions on leaving the house do not apply though when it comes to outdoor exercise. Everyone is allowed to do outdoor non-contact sports and exercises under GCQ such as walking, jogging, running, biking, golf, swimming, tennis, badminton, equestrian, and skateboarding as long as minimum public health standards are followed such as the wearing of masks, observing social distancing, and no sharing of equipment.

For MGCQ, both outdoor and indoor non-contact sports and exercises will be allowed. The same minimum health standards should be observed.

Unlike GCQ areas where mass public gatherings are banned and leisure establishments and areas are closed, under MGCQ movie screenings, concerts, sporting events, entertainment activities, community assemblies and non-essential work gatherings, among others, are allowed — but attendees will be limited to 50% of the venue’s capacity.

Under MGCQ, employees of public and private offices can resume physically reporting to work at full operating capacity. All public transportation will also be allowed to operate as long as minimum health standards are implemented, especially social distancing.

No face-to-face or in-person classes will be allowed under GCQ, while under MGCQ, tertiary schools can conduct face to face classes as long as minimum health standards are followed, although the mass gathering of students will still be banned. For those in K-12, the Department of Education’s Learning Continuity Plan, which includes remote and distance learning, will be adopted for areas under GCQ and MGCQ. — Gillian M. Cortez

Senate to focus on Bayanihan law extension, no time to pass other priority measures

SENATE MAJORITY Leader Juan Miguel F. Zubiri said that the Senate may not be able to pass all priority measures such as the economic stimulus act and the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) before Congress adjourns next week due to the limited number of session days left, adding that the upper chamber will be prioritizing the bill extending the validity of the Bayanihan to Heal As One Law instead.

“Out of practicality, I don’t think we will be able to finish all these measures in three working days…. because these are very important and very tedious topics that we really need to concentrate on per sector. So what we have on the table that we will tackle next week is the extension of the Bayanihan to Heal As One Act,” he said during a virtual joint hearing of the Senate committees on Finance and Economic Affairs on Friday.

Mr. Zubiri said the Malacañang will issue a certificate of urgency to extend the law.

“I called up our contacts in the Palace, I was told that they will issue a certification on the measure. They’re just waiting for the committee report from the chairperson,” he said.

The Bayanihan law allowed President Rodrigo R. Dueterte to realign the budget for anti-COVID-19 measures. Under the law, low-income households were supposed to get as much as P8,000 in monthly cash aid for two months.

Senate Bill (SB) 1546 seeks to extend the effectivity of the law — which will expire next month — until September. Its counterpart measure, House Bill 6811, was also filed in the lower chamber.

“On the issue of PESA (Philippine Economic Stimulus Act) and CREATE, we are also looking into it, prioritizing it, but it is a little bit more complicated so it may take a bit longer in terms of discussions and debate in the Senate,” Mr. Zubiri said.

PESA, a measure currently pending for second reading in the House of Representatives, seeks to inject P1.3-trillion into the economy between 2020 to 2023 to help workers and businesses cope with the impact of the pandemic.

The CREATE bill, also deemed urgent, is being repurposed as a stimulus measure and accelerates the timetable for bringing down corporate income tax to 25% from the current 30% by July.

At least four stimulus packages have been filed at the Senate to address COVID-19: SB 1417 (P108 billion), SB 1449 (P370 billion), SB 1542 (P548 billion for 2020, P80 billion for 2021), and SB 1561 (P600 billion). The upper chamber has yet to agree on a specific amount and consolidate these measures.

Meanwhile, representatives from various sectors have aired their struggles during the pandemic and proposed several measures for consideration by the committees.

Film Development Council of the Philippines Chairperson Mary Liza Diño-Seguerra asked for the inclusion of film businesses in the targeted mass testing and subsidy efforts of the government, saying that thousands of audio-visual workers are now unemployed.

Kilusang Magbubukid ng Pilipinas Chairperson Danilo Ramos asked that farmers, fishermen, and other agricultural workers be included in the bill for subsidies and zero interest loans. The amount is projected to hit up to P400 billion.

Defend Jobs Philippines Spokesperson Thadeus Ifurung proposed to ban layoffs in the next three months and an additional P30,000 subsidy for those rendered jobless during the pandemic.

Philippine Liner Shipping Association President Mark Matthew F. Parco also asked for government support, saying there has been a 70% drop in cargo volume, while passenger volume has dropped by 90%.

Ateneo School of Government Dean Ronald U. Mendoza said that the government should focus on boosting the country’s health capacity and set aside the CREATE bill until the crisis subsides.

“Our suggestion is to delay implementation of… CREATE. On paper, these reforms, in a world not in crisis and if done right, might help boost the country’s competitiveness. A strong healthcare system and social protection system underpinning the recovery and providing a credible assurance of coverage for all citizens… will also be critical in backstopping the psychology of recovery. That should be the main focus of our stimulus and crisis recovery effort,” he said. — Genshen L. Espedido

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