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COVID-19 test machine distributor denies allegations of overpricing, monopoly

OMNIBUS Bio-Medical Systems Inc. has denied allegations that it has hoarded and sold overpriced coronavirus disease 2019 (COVID-19) testing equipment and kits to the national government.

“There is no truth to the reports that the company directly sold Sansure Polymerase Chain Reaction (PCR) machines and test kits to the Department of Budget and Management (DBM), the Central Office Bids and Awards Committee-Department of Health (DoH), and PhilHealth,” the company said in a statement.

Omnibus, the local distributor of medical equipment from China-based company Sansure Biotech Inc., said the confusion over the prices of COVID-19 testing machines happened when general statements were made.

“The allegations failed to note that the company was actually offering packages with different inclusions for clients,” the company said.

Omnibus said that when it facilitated the sale of a Sansure machine for Go Negosyo’s Project Ark, the price was $35,000 or around P1.75 million.

“This was done via a free on board or FOB arrangement. Go Negosyo was the one who paid the additional costs for air transport, destination charges, storage, and warehousing,” the company said.

Omnibus said it offered a similar machine to the DBM’s procurement service on April 23.

The ready-to-use package, priced at P4.3 million, included 25,000 NATCH consumables, which are the plastics used to carry out the ribonucleic acid (RNA) extraction.

“It also included costs such as air transport, destination charges, storage, warehousing, local delivery fees, and warranties, among others,” the company said.

Omnibus said it offered another package to the DBM on May 6.

The offer, which was a promotional letter, amounted to P4 million and included marketing materials for budgetary and reference quotations.

“It was a slightly lower price because the machine and NATCH consumables were priced separately. That was the only difference. All other additional costs were included,” the company said.

The company said it was operating within a difficult delivery scenario and was rushing to accomplish everything in a short delivery period.

Taking into account all the challenges, the company said costs added up to P4.3 million for the machine with PCR consumables, and P4 million for the machine only.

“We stand by our statement that we offered a fair price for both packages mentioned,” the company said.

Meanwhile, Omnibus also denied allegations of monopolizing PCR machines and COVID-19 testing equipment and kits.

“Anyone can easily confirm that they only distribute one of the brands available in the market. Omnibus is the exclusive distributor for the Sansure brand only,” the company said.

According to Omnibus, the Food and Drug Administration has confirmed that there are around 45 approved brands for PCR-based testing.

Even with the claimed exclusive distributorship of Sansure products, Omnibus said there are at least three other companies selling similarly branded products in the Philippines.

In addition, Omnibus said that it lost the bid for the COVID-19 test kits and does not have an existing business transaction with the DBM, DoH, and PhilHealth with regard to test kits and medical equipment.

“We value our customers and will never engage in profiteering, hoarding, or blackmailing. We stand on two decades of hard work and service commitment to our stakeholders through the selfless dedication of our employees,” the company said. — Revin Mikhael D. Ochave

Pag-asa seaport set to open in June

THE seaport project in the heavily contested Pag-asa Island is slated to commence operations on June 12, the Department of Transportation reported late on Thursday.

In 2017, the Philippine Congress allotted P450 million to the department for the construction of a port within Kalayaan, Palawan, also called the Spratly Islands, located in the West Philippines Sea.

Transportation Secretary Arthur P. Tugade told President Rodrigo R. Duterte during the meeting of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) that there will be no formal ceremony to open the port.

“Sabi ko wala nang inaugurate-inaugurate. Mahigit 10 ‘yan. Sabi ko, operate na lang (I said, there will be no inauguration. There might be more than 10 people to attend. I said, just operate it),” Mr. Tugade said.

On May 13, the Philippine Navy was able to dock a vessel at Pag-asa for the first time as construction of the port was about 90% complete. The ship’s visit was part of its rotation and reprovisioning mission through various detachments among the Kalayaan islands.

A beaching ramp and a 1.3-kilometer airstrip project by the Department of Defense are also nearing completion. These are meant to expedite the delivery of construction materials to the island.

In 2017, President Duterte ordered the reinforcement of Pag-asa. Less than 400 residents reside on the remote island, which has one elementary school and a five-bed clinic.

It was reported that China has militarized seven reefs in Kalayaan which the Philippines has also been claiming. The government established the island town in 1978.

In 2016, the Permanent Court of Arbitration affirmed the Philippines’ exclusive sovereign rights over the disputed islands in the West Philippine Sea.

Meanwhile, also at the IATF-EID meeting, Mr. Tugade said an electronic ticketing system for maritime transportation is set to run by December.

“By December, pwede nang umpisahan (the ticketing system can start). Ngayon, nasa test run (it is currently undergoing a test run). May ticket na pag sumakay ka ng maritime vessels (There will be tickets now when you travel via maritime vessels),” the Transportation official said.

He said the ticketing system, which is currently employed in train and aviation platforms, would eliminate tickets reselling and overloading of ships. — Adam J. Ang

Duterte calls for staggered tuition payments

PRESIDENT Rodrigo R. Duterte is calling on schools to accept staggered tuition payments to address difficulties of parents in paying for their child’s education amid the coronavirus disease 2019 (COVID-19) crisis.

During the meeting of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) on Thursday night, Mr. Duterte said, “I hope that you’d allow a staggered payment or installments lang sa mga eskwelahan (in the schools).”

Widespread quarantines have been imposed because of the COVID-19 pandemic, with classes in all levels being suspended, and much economic activity grounding to a halt. More than 2 million employees have been displaced since Mr. Duterte first imposed a Luzon-wide lockdown on March 17, according to the Labor department. Many other areas in the country were subsequently also locked down.

Mr. Duterte said parents who don’t have the financial means to settle tuition fees can choose to avail of loans from the state-owned Land Bank of the Philippines.

“We have the Land Bank and kindly listen to the rules kasi itong Land Bank bubuksan namin (because Land Bank will be opened by us) and you can borrow money to finance the education of your children,” he said.

Enrolment is scheduled to begin next month. The Department of Education (DepEd) is pushing for a remote enrolment scheme to avoid physical interaction as much as possible.

Classes will begin on Aug. 24, but Mr. Duterte said in a speech last week that he is not comfortable with students going to schools while there is still no vaccine against the COVID-19 virus. — Gillian M. Cortez

SWS says: more Pinoys used wages for daily expenses than cash aid

A NEW survey by the Social Weather Stations (SWS) showed that when it came to paying for their daily needs, nearly half of those surveyed spent their wages rather than cash aid.

In a statement released on Friday, SWS said that based on its special Covid-19 Mobile Phone Survey conducted earlier this month, “45% of Filipino families use money earned from a job for their daily household expenses, 39% use money that was given (money amelioration), 21% use their personal savings, and 6% use money that was lent (money-loan).”

The non-commissioned survey had 4,010 respondents across the country who were contacted through mobile phone and computer-assisted telephone interviewing (CATI). The sampling error margin is ±2% for national percentages and ±6% for Metro Manila, ±2% for Balance Luzon, ±3% Visayas, and ±3% in Mindanao.

According to SWS, the source of money used by Filipinos to spend on daily necessities differed per region, with 41% of respondents in Metro Manila saying they used money amelioration for their expenditures while 33% use their salaries.

For the rest of the regions, most Filipinos relied on their wages for their daily needs: 51% in the Visayas, 49% in Mindanao, and 43% in Balance Luzon.

The study comes as the Philippines has been locked down in an effort to control the spread of the SARS-Cov-2 virus which causes COVID-19. The government has allocated funds for its social amelioration program (SAP) which aims to help 18 million of the poorest households.

Metro Manila contributes most to the country’s GDP and has the highest minimum daily wage (P537) out of all the regions. — Gillian M. Cortez

PHL to open up economy as lockdown eases

By Jenina P. Ibañez and Genshen L. Espedido, Reporters
and Adam J. Ang

THE Philippines will allow nearly all economic sectors to resume operations, as the country relaxes one of the world’s longest and strictest lockdown restrictions on June 1.

The government on Thursday night said it will place under general community quarantine (GCQ) the National Capital Region, Cagayan Valley, Central Luzon, Calabarzon, the provinces of Pangasinan, and Albay, and Davao City. The rest of the country will be under a modified GCQ.

Most businesses will be allowed to operate at 50% up to full capacity in areas under GCQ, a move that the government hopes will jumpstart the economy’s recovery as it faces a recession.

“Practically, almost all industries, all sectors will be open except for the few exception(s),” Trade Secretary Ramon M. Lopez said in a television interview on Friday.

Under Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) guidelines, industries including utilities, agri-fishery and forestry, food manufacturing and supply chain, groceries, food take-out and delivery, logistics, health, information technology and telecommunications, and media may operate at full capacity under the GCQ.

Some industries can operate between 50% to full capacity, including mining and manufacturing, e-commerce, delivery, repair, and housing and office services.

Industries that can operate at 50% capacity include financial services, legal and accounting, auditing, professional, scientific, and technical services, non-leisure establishments, as well as wholesale and retail establishments.

Companies under these industries may continue to have work-from-home and other alternative work arrangements.

Shopping malls may have limited operations, excluding leisure establishments and services.

Some public transportation, including road, rail, maritime, and aviation may operate at limited capacities, with one-meter distance between passengers.

The Transportation department said trains, point-to-point buses, shuttle services, taxis, tricycles, bicycles and transport network vehicle services (TNVS) can operate during Phase 1 covering June 1-21. No provincial buses will be allowed to enter Metro Manila. For Phase 2 that starts June 22, public utility buses, modern public utility vehicles and UV Express will be allowed to operate.

Flag carrier Philippine Airlines (PAL) and budget airline Philippines AirAsia, Inc. said they will resume commercial operations on June 1. They are currently coordinating with the government regarding its guidelines in allowing air travel and reopening of airports.

“We are currently checking with aviation authorities and respective LGUs (local government units) for their own guidelines regarding the opening of local airports, as some may still be closed in June,” AirAsia said in an advisory, Friday.

“PAL is closely coordinating with local and national government authorities on the necessary implementing rules and arrangements to finalize our routes and flight schedules,” PAL said on Wednesday.

The Transportation department also said it will reopen the international gateways in Clark, Cebu, and Davao to decongest the Ninoy Aquino International Airport (NAIA). Airports in Zamboanga, Iloilo, Bacolod, and Bohol are also eyed for reopening.

Domestic flights will only be allowed between areas under GCQ.

SOME RESTRICTIONS REMAIN
However, amusement, gaming and fitness establishments as well as industries catering to children and tourism may still not operate under GCQ. Concerts, sporting events, community assemblies, and non-essential work gatherings are not allowed.

Hotels may operate only if they are accommodating existing bookings from foreigners as of March 17, 2020 for Luzon and May 1 for others, guests with existing long-term bookings, repatriated overseas Filipino workers (OFW), stranded Filipinos or foreign nationals, non-OFWs that are required to be in quarantine, healthcare workers and employees from operating establishments.

Only basic accommodation services in hotels will be allowed to operate, while added services like gyms and spas may not operate.

RESTAURANTS TO REOPEN?
Meanwhile, the Department of Trade and Industry (DTI) on Friday recommended a gradual reopening of restaurants with dine-in services in areas under GCQ.

Trade and Industry Undersecretary Ruth B. Castelo said Mr. Lopez is recommending the gradual reopening of restaurants during the GCQ, but “only those who can comply with the DTI-issued protocols can resume operations.”

In a presentation before the House committee on trade and industry, Ms. Castelo said DTI-issued protocols include the enforcement of a “no mask, no entry” policy, social distancing protocols, regular sanitation, availability of non-contact modes of payment, and mandatory wearing of personal protective equipment for employees, among others.

While dine-services are recommended, Ms. Castelo said that the DTI “highly discourages” buffets and salad bars.

She added that all operations are subject to post-audit from the DTI, Department of Labor and Employment, Department of Tourism and respective local government health offices.

“We can do random inspections, as we normally do and we will recommend the closure of business establishments that do not comply with health protocols imposed by the government,” Ms. Castelo said.

FURTHER EASING UNDER MGCQ
As the rest of the country shifts to a modified general community quarantine (MGCQ), all industries will be allowed to operate. Only some service-oriented sectors will continue operating at a limited capacity.

“Sa GCQ, they (service sector) are not yet allowed but we’re finding ways especially if they are able to strengthen ‘yung minimum health protocol that they can institute to limit the transmission (of COVID-19)… kailangan ma-address ‘yung concerns na ‘yun so that we can consider reopening them earlier, even under GCQ,” Mr. Lopez said.

“We want to really bring back more jobs back to work,” he added.

Mr. Lopez said that barbershops, gyms, cinemas, and personal care services may operate with 50% capacity under the MGCQ.

The MGCQ is the most relaxed form of the lockdown designed to address the coronavirus outbreak.

When the areas shift to MGCQ, places of worship like churches may also operate up to 50% capacity. Other businesses that will be reopened at limited capacity under this relaxed lockdown measure include sports facilities, theaters, bars, libraries, museums, tourist destinations, and travel agencies.

PHL gets $1.25-billion worth of loans for coronavirus response

THE Philippine government secured two loans worth a total of $1.25 billion (P63.28 billion) from the Asian Infrastructure Investment Bank (AIIB) and World Bank to help in its fight against the coronavirus disease 2019 (COVID-19) pandemic.

China-backed AIIB said in a statement its board approved the $750-million (P38 billion) loan, which the Philippine government will use for programs to expand testing, enhance quarantine measures, boost social protection and livelihood support, extend relief to small businesses, as well as support agriculture and other affected sectors.

The policy-based loan will be drawn from AIIB’s $10 billion COVID-10 Crisis Recovery Facility which aimed to help the public and private sector cope with the pandemic.

“The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” AIIB Vice President for Investment Operations D.J. Pandian was quoted as saying.

The Beijing-based multilateral lender said it does not have a regular facility for policy-based financing but it extended the financial support “on an exceptional basis” via projects co-financed with the Asian Development Bank and World Bank.

At the same time, the World Bank said it gave the green light for a $500-million (P25 billion) loan to the Philippines to fund efforts mitigating the impact of COVID-10 pandemic on the most vulnerable sectors and provide financial aid to small and medium enterprises (SMEs).

Finance Secretary Carlos G. Dominguez III was quoted as saying the “swift loan approval underlines the strong international confidence in the government’s capability to meet the massive financial requirements of containing this global health emergency.”

The $500-million loan from the World Bank will mature in 29 years and has a grace period of 10 and a half years.

“This new financing can help with the delivery of financial support for struggling families and communities while the country is ramping up efforts to contain the pandemic and reduce its economic impact,” Achim Fock, World Bank Acting Country Director for Brunei, Malaysia, Philippines and Thailand said in a statement yesterday.

Washington-based World Bank said the loan will partially fund the government’s P200-million subsidy program to 18 million poor families affected by the lockdown, as well as the P50-billion wage subsidy program for employees of SMEs.

The new funding will also support other state interventions that will extend financial relief to affected businesses through deferrals of tax payments and credit guarantee schemes.

Citing data from the surveys conducted by the government, the World Bank said the majority of small companies in affected areas in the country had to shut down temporarily due to the enhanced community quarantine imposed in Luzon and some parts of the country in mid-March.

Metro Manila will transition into a general enhanced community quarantine on June 1.

The loans from AIIB and WB will add to the $4.858 billion (P246 billion) that the government has borrowed for pandemic relief efforts as of May 14, based on Finance department data.

In April, World Bank has approved a total of $600 million (P30 billion) of loans for the Philippines’ response to the pandemic — a $100 million (P5 billion) loan on April 23 for the COVID-19 Emergency Response Project and the $500-million (P25 billion) Third Disaster Risk Management Development Policy loan on April 9.

The ADB also approved last month $1.5 billion (P76 billion) worth of loans for the country’s COVID-19 fight and another $200 million (P61 billion) to support the government’s social protection program. — Beatrice M. Laforga

PEZA approves P13.1B in new investments amid lockdown

THE Philippine Economic Zone Authority (PEZA) said it approved P13.1 billion worth of committed investments for the months of April and May, which are expected to generate nearly 20,000 new jobs.

In a statement, the investment promotion agency said it approved 26 new projects on May 21, its first meeting since the Luzon-wide lockdown began in mid-March.

The projects are estimated to employ 19,894 workers. PEZA said 68.5% of investors are foreign, including American, Japanese, Taiwanese, and Chinese.

This brought PEZA-approved investments to a total of P29.6 billion for 113 projects in the first five months of 2020. The agency did not give comparative figures.

PEZA’s approved investments in the first quarter slumped 28% to P16.5 billion from P22.9 billion in the same period last year after its board failed to meet during the lockdown.

The number of approved projects in the first quarter fell by 32% to 87 from 128 a year ago.

“Being the top investment promotion agency in the country that contributes to export income, employment and investment for the Filipino nation, PEZA is glad to share positive news amidst the pandemic,” PEZA Director General Charito B. Plaza said.

“The approval of new investments or projects is the agency’s positive action to support the Philippine economy in our endeavor to maintain our competitiveness for investments despite the impact of COVID.”

PEZA oversees 408 economic zones with 4542 locator companies employing 1.6 million workers.

Among PEZA-registered companies, 1,701 or 64.58% are operating as of May 25. They are operating at full, minimized, and work-from-home capacities. The rest have suspended operations.

Ms. Plaza said that the Philippines should be able to continue to attract new and expanded investments.

“This can be done by enhancing PEZA’s internationally renowned one-stop-shop, tried and tested tax incentives, ease of doing business, quality human resource and natural resources, despite the underdeveloped factors the country have in terms of infrastructure, logistics facilities, and supply chain.”

PEZA continues to support the “status quo” on tax incentives even amid new proposals to immediately cut corporate income tax and lengthen the sunset period for existing fiscal incentives.

Ms. Plaza has said that she’ll “leave it to the senators (because) they’re the ones who will vote.” — Jenina P. Ibañez

House approves FIST Act on second reading

By Genshen L. Espedido, Reporter

THE House of Representatives on Thursday evening approved on second reading a bill providing for the transfer of banks’ bad loans to asset management companies (AMCs), as a spike in non-performing loans is expected during the coronavirus crisis.

“We cannot afford a banking industry that has become anemic. That is the first thing that we must avoid as an economy. When we have a banking industry that responds to the credit requirements of our businesses, we need a healthy banking industry. At the end of the day, a vibrant, health financial sector is what we need if we are aspiring for a speedy economic recovery,” Quirino Rep. and House committee on banks and financial intermediaries chair Junie E. Cua said during the plenary session on Thursday.

House Bill 6816 or Financial Institutions Strategic Transfer (FIST) bill is aimed at encouraging financial institutions to sell non-performing assets (NPAs) to AMCs that specialize in handling distressed assets.

In the case of non-performing loans, AMCs can restructure debt, condone debt and undertake other restructuring-related activities to dispose of the debt, including to third parties.

The transfer of non-performing assets from a financial institution to an AMC, and from an AMC to a third party will be exempt from documentary stamp tax, capital gains tax, creditable withholding income tax and value-added tax.

Transfers are also subject to only 50% of applicable registration and transfer fees, 50% of filing fees on any foreclosure, and 50% of land registration fees. These privileges will be available for up to two years from the date of the effectivity of the bill’s implementing rules and regulations.

The bill also provides that any loss incurred by financial institutions as a result of the transfer of NPAs will be treated as ordinary losses, provided that the accrued interest and penalties will not be included as loss; the carry-over will be subject to pertinent laws; and the tax saving derived by financial institutions from the net operating loss carry-over will not be available for dividend declaration.

Only the Court of Appeals and the Supreme Court are empowered to issue injunctions against the transfer of NPAs.

AMCs will be required to set up consumer protection mechanisms “as may be prescribed in the IRR issued by the appropriate regulatory authority.”

The measure also encourages the private sector, government financial institutions, and government-owned and -controlled corporations to incorporate and invest in FIST corporations and help in the rehabilitation of distressed businesses “with the end view of contributing to economic growth.”

Mr. Cua included an amendment which states that any fraud, collusion or irregularity committed during the transfer of NPAs will be subject to penalties and other pertinent laws and regulations.

“In the transfer of NPAs, the parties shall exercise the requisite due diligence and any fraud, collusion or irregularity shall be subject to Section 24 of this Act as well as other pertinent laws, rules, and regulations,” he said.

Under Section 24 of the bill, violators face a maximum of P2 million fine and/or imprisonment of not more than 12 years.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on May 21 said that the proposed FIST Act will serve as a safeguard for the financial system.

“I guess it’s better to have it now in anticipation of what might happen if things deteriorate. But at the moment, NPLs (non-performing loans are) very low… But we don’t know whether this pandemic will persist,” Mr. Diokno said.

With the industry’s non-performing assets currently at 2.1%, banks are already factoring in a likely increase in bad loans, according to Noel Neil Q. Malimban, deputy director at the BSP Office of General Counsel and Legal Services.

Meanwhile, House Bill 6768 or the Financial Products and Services Consumer Protection Act which gives financial regulators rulemaking, surveillance and inspection, market monitoring, and enforcement powers relative to consumer protection was also passed on second reading.

Instituto Cervantes screens anti-death penalty film online this weekend

INSTITUTO CERVANTES de Manila will be screening online for free the Spanish classic film El Verdugo (The Executioner), Luis Garcia Berlanga’s 1963 black comedy about the death penalty, on May 30 and 31.

The film is the fourth to be shown in the Spanish cultural center’s ongoing Contigo Clasico (Classics with You) program which is screening 11 classics of Spanish cinema every weekend. The program started on May 9 with Death of a Cyclist (1955) by Juan Antonio Bardem and was followed by Welcome! Mr. Marshall (1953) by Luis García Berlanga and Luis Bunuel’s Viridiana (1961).

Each film will only be available for 48 hours. All films have English subtitles.

The films were chosen because they were movies that “connected with the public of their time and that today are considered reference films of Spanish cinematography,” according to a press release.

El Verdugo revolves around a young undertaker who marries the daughter of the executioner and therefore inherits, albeit reluctantly, the job of his wife’s father.

The film is considered Mr. Berlanga’s masterpiece and was described by Spanish filmmaker Pedro Almodovar as the “best film ever made about the death penalty.”

It caused a big international uproar when Francisco Franco’s government (having just carried out a number of public executions) unsuccessfully tried to stop the film from screening at the Venice Film Festival. The dictator failed and the film won the Critics’ Choice Award at the festival.

Mr. Berlanga’s films are known for their sense of irony and are satires of different social and political situations. Despite the political nature of his films, he had the ability to skirt around censors during the Franco dictatorship, allowing him to create films such as El Verdugo and Los Jueves, Milagro or Miracles on Thursdays (1953).

His works won awards in the most important film festivals incuding the Cannes Film Festival and Berlin Film Festival.

His last film was El Sueno de la Maestra in 2002. He died at the age of 89 in 2010.

Instituto Cervantes’ Classics with You program will continue its run through July with the films, La Vaquilla (1985) by Luis García Berlanga; The Spirit of the Beehive (1973) and The South (1983), directed by Víctor Erice; The Good Star (1997) by Ricardo Franco; The Holy Innocents by Mario Camus in 1984; Tasio (1984) by Montxo Armendáriz; and Carol’s Journey (2002) by Imanol Uribe.

Follow this link to see El Verdugo: https://cultura.cervantes.es/manila/en/El-verdugo/133261. — ZBC

May inflation likely settled at 1.9% to 2.7%: BSP

REUTERS

INFLATION in May likely fell within 1.9% to 2.7%, with upside risks mainly coming from the increase in food prices, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Friday.

“The BSP Department of Economic Research projects May inflation to settle within the 1.9% to 2.7% range; the point inflation projection is 2.3%,” Mr. Diokno told reporters in a Viber message.

This estimate range is well within the BSP’s 2-4% target for this year as well as its 1.75% to 3.75% projection on the back of slowdown caused by the pandemic.

The central bank in April said it sees inflation averaging at 2% this year due to the impact of the outbreak, down from the 2.2% forecast given in March.

If realized, the BSP’s 2.3% point projection for May will be faster than the 2.2% print in April but still slower than the 3.2% logged in the same month last year.

In the first four months of 2020, inflation averaged 2.6%.

The Philippine Statistics Authority is set to report May inflation data on June 5.

May has seen various upside risks to inflation, Mr. Diokno said.

“Higher domestic oil prices as well as the uptick in the prices of various agricultural products due to bottlenecks and the impact of typhoon Ambo contributed to positive price pressures during the month,” he said.

Oil prices saw some recovery in May after major producers implemented supply cuts of about 9.7 million barrels per day or about 10% of global supply to support prices as demand waned due to the pandemic.

Energy Secretary Alfonso G. Cusi has said about 10% of oil retailers’ fuelling stations shut down temporarily in areas under enhanced community quarantine. He said oil prices are likely to remain volatile until the end of the third quarter due to lower demand and restricted mobility.

Meanwhile, data from the Philippine Statistics Authority showed the average farm gate price of palay or unmilled rice inched up by 0.75% week-on-week to P18.81 per kilogram in the first week of May, rising by 1.95% year-on-year.

Data also showed the average wholesale price of regular-milled rice increased by 0.88% to P35.40 per kilo, while the retail price rose 0.11% to P37.90. For well-milled rice, prices rose by 0.64% to P39.28 per kilo while retail price inched up by 0.38% to P42.34.

On the other hand, downside risks to inflation may emerge from lower power charges, Mr. Diokno said.

“The electricity rates in Meralco-serviced (Manila Electric Co.) areas declined during the month despite the reported increase in the total electricity bill due to higher consumption,” he said.

Meralco earlier said the overall electricity rate in May will go down by P0.2483 per kilowatt-hour to P8.7468 from P8.9951 in April. This means that households will likely see their bills drop by around P74.49 to P124.15, depending on their consumption.

The lower monthly rate was caused by the force majeure claim Meralco had invoked in its power supply agreements following the 30% drop in power demand during the lockdown. — L.W.T. Noble

IBPAP seeks transition period for CREATE incentives system

THE OUTSOURCING industry is requesting the government for a longer transition time before changing the current incentives system, while supporting the move to cut corporate income tax to 25% from 30% in July.

The Information Technology and Business Process Association of the Philippines (IBPAP) said in a statement on Friday that the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act would help attract foreign direct investments into the country.

The earlier proposal, CITIRA, proposed to cut corporate income tax to 20% gradually over a decade. CREATE lengthens the sunset provision for enterprises enjoying incentives to four to nine years.

But IBPAP also asked that existing investors be given an additional five years before any changes in the current incentives system prior to the proposed sunset provisions.

“Grant existing investors and locators with a 5-year deferment of any changes to current incentives to counterbalance serious uncertainties brought about by the health crisis and give them ample time to recoup losses. After this much-needed deferment, we can then proceed with the sunset provisions.”

IBPAP also said new investors and locators should be offered at least 10 years of incentives to help the Philippines compete against other countries.

The group also said the Fiscal Incentives Review Board should have jurisdiction over “very large” investments, suggesting investments worth $1 billion or more. They said investment promotion agencies should cover all investments under the threshold.

“Keep the one-stop-shop nature of the Philippine Economic Zone Authority (PEZA) as they have been an effective proponent of the country as a premier investment destination.”

The expanded functions of the Fiscal Incentives Review Board (FIRB) under the bill would put it in charge of approving incentives and overseeing the investment promotion agencies.

The Makati Business Club has also recommended that the FIRB approve large investments.

Trade Secretary Ramon M. Lopez in a statement on Thursday said CREATE would be a “key answer” to attract foreign direct investment.

“Non passing of corporate tax reform… creates uncertainties in the business environment and we have to address this,” he said.

He said the ability to grant tailor-fit incentives to investors would help the Philippines match countries that offer flexible incentives packages. — Jenina P. Ibañez

Unused tax credit certificates to be converted to cash after a year

TAX CREDIT certificates (TCCs) that remain unused for more than one year will be converted into cash, the Bureau of Internal Revenue (BIR).

BIR Commissioner Caesar R. Dulay issued Revenue Regulations (RR) 14-2020 on Thursday to amend provisions on the cash conversion of unutilized TCC.

The directive was approved by Finance Secretary Carlos G. Dominguez III on March 6.

“Any TCC which remains unutilized for more than one year at any given interval of time during its validity shall be converted into cash with prior written notice by the BIR, subject to the availability of funds in accordance with the procedural requirements that will be issued by the BIR for this purpose,” the amended rules read.

A TCC is a document reflecting the amount due to a taxpayer from the overpayment or erroneous payment of taxes.

A taxpayer has the option to use the TCC as payment for any tax liabilities via a tax debit memo (TDM) or it can be converted into cash “in case the taxpayer-owner has no…use for it,” according to BIR.

A taxpayer can file a request to convert the unused tax credits into a cash refund within the validity period of the TCC provided that the original copy is surrendered to the BIR for verification and cancellation and a refund check or treasury warrant is issued.

However, a refund check that will remain “uncashed or unclaimed within five years” from the day it was issued will be “forfeited in favor of the government.” The amount will be remitted back to the state’s general fund.

“All TCCs which are already expired upon the effectivity of this regulations shall be automatically cancelled by the BIR, except those TCCs which are with the BIR, for purposes of utilization thru TDM, conversion or revalidation, before the expiration of their respective dates of validity,” the bureau said.

The regulations will take effect 15 days after the RR 14-2020’s publication on Friday, May 29. — B.M. Laforga

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