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DoE circular on smart grids due by 3rd quarter

THE DEPARTMENT of Energy (DoE) is scheduled to issue in the third quarter a circular covering the operation of smart grids in the Philippines as distribution utilities embark on projects to upgrade power systems in line with advances in the technology.

“Many have already adopted and implemented some level of smart grid initiatives in their operations, and the DoE is spearheading the formulation of a policy framework and roadmap for the smart grid implementation,” said Energy Assistant Secretary Redentor E. Delola during the The Future Energy Show at the Mall of Asia’s SMX Convention Center in Pasay City.

“As part of its implementation, we have already undertaken steps, such as the identification of the plans, projects and programs for the generation, transmission, distribution and load sector necessary for the establishment of the national smart grid framework; the creation of smart grid technical working group; the conduct of forums and workshops; and collaborating with other government agencies, stakeholders, private companies, and the academe through information sharing and education campaigns,” he added.

Mr. Delola was delivering a message for DoE Secretary Alfonso G. Cusi who was scheduled to give the conference’s keynote speech. He told reporters that a circular on smart grids is set to be released in the third quarter.

“It’s a roadmap pero in form of a circular ang ilalabas (It’s a roadmap but will be released in the form of a circular),” he said.

Mr. Delola said a smart grid includes the latest advancement in information, communication and technology. It allows households to receive real-time information on their power consumption. The same information is also available to distribution utilities.

He said when the country achieves full smart grid coverage, the level of competition will also be at full blast, that is, households will be able to directly buy electricity from retail suppliers.

With smart grids, households will also have access to information on when electricity demand is at its lowest, allowing them to schedule energy-consuming activities during off-peak hours when power costs are lowest.

Mr. Delola said smart grids would allow the system’s load profile to flatten as opposed to its current behavior, which is “too peaky.” Power demand peaks during times of the day when electricity usage is at its highest, resulting in thinning reserves and possible power outages.

He said the proposed circular will include specific capital expenditure projects that match the level of development of a distribution utility. The circular will enumerate the projects that an electric cooperative with minimal technology investments need to do, he said.

“The ERC (Energy Regulatory Commission) will just look into that roadmap, pagka-identified ka ng (when you are identified by the) Department of Energy at level 1, you can apply for these projects,” Mr. Delola said, adding that the regulator will have a guide on the projects that it needs to approve.

“We’re looking at five levels,” he said, with the country’s largest power distribution utility Manila Electric Co. (Meralco) at level 4. “Level 5 is really integrating everything — the DERs (distributed energy resources), lahat nung mga (all the) current developments.”

“When you talk about Meralco or Aboitiz, medyo (they’re a bit) advanced,” he said. “When you look at the coops malayo pa (they’re still far behind).” The Aboitiz group leads the biggest power distribution utilities in the Visayas and Mindanao.

In his speech, Mr. Delola said the forum is “very relevant and timely” as the DoE is working on how to ensure energy supply security and greater access to energy through the utilization of innovative technologies that will provide great help to fuel the economy in a sustainable manner.

“There are several factors that drive us to improve our current power system and venture towards smart grid. First, to have a more reliable, more efficient, secure and flexible grid, there is a need to integrate new and emerging technologies in our system. Second, the promotion of renewable energy as our policies, like net metering, renewable portfolio standards, green energy option, and a provision of a renewable energy market, make our system more complex,” he said.

“Third, the government is also promoting the use of electric vehicles, where over two million were sold in 2018 and its number is expected to increase significantly in the future. Lastly, the rapid development of ICT. All of these call for the urgent shift to smart grid, which is expected to provide a safe environment, reliable sources, flexible, sustainable and more efficient system, and competitiveness towards consumer empowerment.” he said. — Victor V. Saulon

Trade dep’t says cement prices stable after temporary duty

THE Department of Trade and Industry said cement prices remain “stable” even after it levied a temporary safeguard duty on imported cement.

“The DTI continues to monitor prices… Based on the latest monitoring report, prices are stable, and supply is sufficient,” Luis M. Catibayan, director of the agency’s Bureau of Import Services told reporters on Monday on the sidelines of the Tariff Commission’s public hearing on the safeguard duty case on local cement.

Some Trade officials were asked to provide data on cement prices but had not replied at deadline.

Mr. Catibayan, in his statement at the hearing, reiterated that the duty does not cause a shortage, and that the measure was largely in consideration of public interest, particularly the role of domestic producers in economic activities such as the Build, Build, Build infrastructure program.

Trade Secretary Ramon M. Lopez assured that the safeguard duty of P210 per metric ton of P8.40 per bag will not result in a shortage and will only lead to a 3.8% increase in current prices.

The DTI launched an investigation after cement imports surged from 3,558 metric tons in 2013 to more than three million metric tons in 2017.

The share of imports — from non-manufacturer or “pure” traders — increased to 15% from only 0.02% during the four-year period, when the industry’s earnings before interest and taxes had declined, most evidently in 2017 when they slumped 49%.

Meanwhile, Mr. Catibayan said the setting of a suggested retail price on cement is still under review.

The DTI ordered cement manufacturers to maintain their current retail prices with the department monitor the market for price increases.

The order took effect in February and will be implemented for 200 days to allow the Tariff Commission to complete its investigation on whether such protection is warranted.

Under Republic Act 8800 or the Safeguard Measures Act of 2000, a provisional duty is imposed under “critical circumstances where a delay would cause damage which would be difficult to repair, and pursuant to a preliminary determination that increased imports are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry.”

The Tariff Commission started yesterday its public hearings which run to May 24. — Janina C. Lim

DICT functions need to be reviewed to clear up overlaps, think tank says

THE FUNCTIONS and powers of the Department of Information and Communications Technology (DICT) need to be reviewed to improve the department’s effectiveness, according to a study by the Philippine Institute of Development Studies (PIDS).

The state think tank said in its study, “ICT regulation and regulatory authority” by consultant Lai-Lynn Angelica B. Barcenas that policymakers must conduct the review as there is currently “insufficient guidance on the scope of the DICT’s power.”

The DICT was authorized by Republic Act No. 10844, or the Department of Information and Communications Technology Act (DICTA) of 2015. It was meant to absorb the communications regulatory function from what was then the Department of Transportation and Communications.

Under the DICT are the National Telecommunications Commission, National Privacy Commission and Cybercrime Investigation and Coordination Center.

The PIDS study said the formation of the DICT resulted in “incompatible or overlapping functions with other departments,” including the Postal Regulation Division for courier services, functions of promoting trade and investment in e-commerce, and regulation of telecommunications and broadcast operators and ICT-related manufacturers.

It said while the DICT took over some of the functions of the Postal Regulation Division, it also covers online payments, which is better off under the hands of the Bangko Sentral ng Pilipinas (BSP).

“Given the potential for overlaps with other government agencies, the lack of specificity in the extent of the powers of DICT creates uncertainty,” it said.

Ms. Barcenas noted this could be solved by issuing regulations and joint issuances with the departments whose functions overlap with that of the DICT, such as the BSP and the Department of Trade and Industry.

Aside from overlapping functions, the study also noted how the DICT could exercise its authority in welcoming ICT investment in the country, as restrictions such as foreign ownership and acquiring legislative franchises are still roadblocks to ICT development.

“With the challenges in the legal interpretation of ‘Internet business,’ establish innovative measures that will encourage further innovation in the ICT sector.

This could include the creation of regulatory sandboxes for businesses wishing to test an emerging technology without being bound by all the regulations that would normally apply,” it said.

“But for services that affect public interest, such as mass media, there is a need to study how to balance the need for innovation with the need to regulate content, such as child pornography, fake news, cyberbullying, and fraud, among others,” it added.

DICT Acting Secretary Eliseo M. Rio, Jr. was asked to comment, but had not replied at deadline time. — Denise A. Valdez

House passes bill creating CSR reporting obligation

THE House of Representatives passed on third and final reading Monday a bill requiring companies to disclose their corporate social responsibility (CSR) activities.

House Bill 9061 received 158 affirmative votes with no negative votes or abstention.

The proposed Corporate Social Responsibility Act requires companies to report their CSR activities as part of their annual and regular reporting to the Securities and Exchange Commission, Department of Trade and Industry (DTI), or the Department of Finace..

The measure defines CSR activities as charitable programs and projects, scientific research, youth and sports development, cultural and educational promotion, services to veterans and senior citizens, social welfare, environmental sustainability, health development, disaster relief and assistance, socialized and low-cost housing, and employee and worker welfare programs.

The law also calls for DTI to reward and recognize business establishment for their CSR-related services.

It also encourages local government units to help organizations in their CSR-related projects or programs. — Vince Angelo C. Ferreras

Senate passes bill conditionally allowing more than 8 hours’ work a day

THE Senate on Monday approved on third and final reading a measure amending Presidential decree No. 442, which will allow companies to require workers to work beyond eight hours a day, subject to certain conditions.

With 17 affirmative votes and zero negative, the chamber passed Senate Bill No. 1571.

If enacted, Article 83 of the Code will allow workers to work beyond normal hours in cases “when the exigency of business operations or the national emergency requires the adoption of alternative work arrangements.”

The Department of Labor and Employment, as implementing agency, may determine conditions allowed for the alternative arrangement and ensure that work hours do not exceed 48 hours a week.

The bill, written by Senator Emmanuel Joel J. Villanueva, also authorizes DoLE to regulate the flexible-hours to protect workers.

Meanwhile, its counterpart measure, House Bill 8826, written by Makati City-1st district Rep. Manuel Monsour T. del Rosario III, remains pending at the committee level. — Charmaine A. Tadalan

Forgetting the past and moving forward for taxpayers

Last Saturday, I had my monthly checkup with my gynecologist. Unfortunately, on our way to the hospital, I slipped off the last stair in our condominium lobby. With my right foot sprained, I thought of rescheduling my checkup, as it was so difficult to walk. With a baby inside me, however, I needed to push through. I needed to ensure that she (Yes, it’s a girl!) is fine and was not harmed due to my carelessness. Thankfully, I was able to proceed with my checkup, and the baby is fine.

Recalling this fearful experience while writing this article, I thought of what Philippine taxpayers go through during a Bureau of Internal Revenue (BIR) audit or assessment. To most Philippine taxpayers, tax assessments are a bad experience that they just want to forget, so that they can move forward with their business.

What are the remedies in order to avoid or at least minimize tax assessments? Is there any remedy if the BIR assessment has become final and executory? How can the taxpayer move forward?

On April 9, while every taxpayer was busy preparing for the filing of their 2018 annual income tax return, the BIR published Revenue Regulations No. 04-2019, providing the much-awaited implementing rules and regulations for the Tax Amnesty on Delinquencies (Revenue Regulations (RR) No. 04-2019).

Under the Tax Amnesty on Delinquencies, a taxpayer with final and executory assessments can now opt to close and forget the assessment by paying only a certain percentage of the basic tax assessed.

The table shows the instances when the taxpayer can avail of tax amnesty on delinquencies, and the applicable tax amnesty rates:

If the delinquencies consist only of unpaid penalties due to late filing or payment, and there is no basic tax assessed, the taxpayer may avail of tax amnesty on delinquencies without any payment due.

Tax amnesty on delinquencies may be availed of by qualified taxpayers until April 24, 2020.

To provide further guidelines on and procedures for the processing of applications for a tax amnesty on delinquencies, the BIR also issued Revenue Memorandum Order (RMO) No. 23-2019 on May 8.

To avail of the tax amnesty on delinquencies, a Certificate of Tax Delinquencies/Tax Liabilities (CTD) must be secured from the appropriate BIR office. Under RMO No. 23-2019, the issuance of a CTD shall be based on the list of Accounts Receivable/Delinquent Accounts to be issued by the Accounts Receivable Management Division of the BIR. Such a list shall, however, not include tax liabilities arising from the taxpayer’s own declaration. Does this mean that the former, even if covered by assessment notices that have become final and executory, cannot be covered by tax amnesty?

If the taxpayer validly protested a Final Assessment Notice/Final Letter of Demand, RMO No. 23-2019 explicitly allows the withdrawal of the protest letter. The withdrawal, however, should have been done prior to the effectivity of RR No. 04-2019. Such an option to withdraw is not specifically provided in RR No. 04-2019. Since RR No. 04-2019 took effect on April 24, but RMO No. 23-2019 was issued on May 8, the option to withdraw may no longer be availed of by taxpayers. Many could have benefited from this option had it been specifically provided in the earlier implementing rules and regulations.

As cited in various fora, the tax amnesty on delinquencies is a welcome development for taxpayers who want to move forward from tax assessments that have become final and executory. Moving forward, however, we hope that the BIR will be more transparent on its implementing rules and regulations. Ample time must be given to taxpayers to avail of the options available.

My sprained foot is now slowly healing with the help of an ice pack. The most important lesson that I learned, though, is that I should always be careful for my baby and myself, just like a taxpayer must always be careful about their tax compliance. Tax compliance must be reviewed quarterly or at least annually to minimize issues in case of a tax assessment. Personnel must always stay updated on the latest rules, options, and updates to minimize compliance costs.

With this, P&A Grant Thornton is offering a half-day seminar on Updates on the IRR of the Tax Amnesty Act, The Revised Corporation Code, and Recent Tax Issuances at Holiday Inn and Suites on June 20.

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

 

Ma. Lourdes Politado-Aclan is a director from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com.

Observations and telltale signs

A week after the e-lections, citizens are questioning its integrity. Just like before, we hear cries of “dagdag-bawas,” be it manual or electronic. But who has the smoking gun? Only telltale signs, so far, that aren’t admissible in court. It’s a given that some won hands down on their own merit and those who fell short of the mark. What we don’t know is the exact count, whether some winners are really losers and if some losers actually won.

We don’t know because the truth is well hidden. There are indications though that something is indeed amiss. Finding out the truth is the right thing to do.

But unless there’s sufficient “smoking gun” evidence to prove beyond reasonable doubt that the e-lections were for sale – by who, for who and against who – putting up a tantrum won’t solve it. We need to get down to the root causes and work fearlessly to excise it altogether from our culture.

Reality tells me we’re just battling the consequences of our continuing collective failure to keep the democratic ideal and spirit alive in our thoughts, words and deeds. Self still comes before country. That’s what our forefathers and national heroes struggled against. When will we ever begin to place country before self and persist through generations?

Many of us ask: when big money is involved, where does it come from — oligarchs? drug and gambling lords? money-laundering machines? nation-states? Without that verboten backing, one has to cough it up. But when the big bucks come rolling in through the backdoor, the next questions to ask are: what’s the return on investment? What’s the real deal?

A candidate needs trunks of cash to mount a national campaign and outdo the competition with deeper pockets. It’s rare for a benefactor to part with his money with no strings attached. I had some who gave freely and unconditionally, and I thank them from the bottom of my heart. But it wasn’t enough to compete head-on. Yet, I still did my duty to offer myself as an alternative for new politics, and my volunteers were heroic.

It would have been better, though, if voters spent for the candidates they truly believe in. Say, for every million supporters contributing 30 bucks monthly for 5 months, that would translate to P150 million. If I had that amount, I would have gone a lot farther in winning the vote and protecting the count. The trouble is that we don’t, and we won’t, have that mindset, not in a long time.

What perplexes is that unlike 2016 when I ran only to introduce myself and build a runway for 2019, I got more votes then, than now. This time around, after obtaining the support of 4 living presidents; local officials and congressmen; and, of ordinary Filipinos across the country and abroad from more investments in social media and radio (unlike 2016), I got less! That got me laughing out loud!

Clearly, there was something wrong. With so much howling about the 7-hr “glitch” on Monday and similarities to what occurred in 2016, one can’t help but wonder whether we still have a real democracy to protect. After all these years since 1946, this year could have been different for the nation.

PHOTO BY PHILIPPINE STAR/MIGUEL DE GUZMAN

Don’t get me wrong. I was up against a tough and seasoned field with mass appeal. Some truly deserved reelection because of past performance. I was honored to be in their company. How I wish, though, that some underdogs, mostly newcomers, made it too that would have made the Senate more eclectic and less “sindicated.”

All we sense, after observing past e-lections, is this: there seems to be a correlation between suspected mind-conditioning survey results, and the results of e-lections. How much did it cost to “win” the vote and “win” the count? A few winners may not fit the pattern or modus operandi, perhaps as a deceptive move to mask reality, and/or unscrupulous insiders mining opportunities to gain financially from tightly contested places, be it No.1 or No. 12.

But sensing is different from “smoking gun.” Proof beyond reasonable doubt is best. Prima facie evidence, meaning “sufficient to establish a fact or raise a presumption unless disproved or rebutted,” is second best. The geniuses who know numbers, algorithms and patterns understand this. So far, I’ve come across a few who don’t know each other but share the same observation.

If the geeks reading this have prima facie evidence, then state your findings and officially file your objections before it’s too late. Better still, if there are insiders whose consciences are bothering them, take the side of truth and honor now to make things right. Open the windows wide and let the sunshine in.

This much I can say: when we begin to trash self-gratification for the common good; transcend self-interest for the national interest; and finally mature into a responsible and accountable society, then it will be the dawning of a new Philippines for all Filipinos.

If we want to put an end to negotiable elections and sub-standard choices, we must recover our values, reform our mindsets and transform our political culture. If we don’t start now, we’ll remain stuck in this black hole, where the people and democracy won’t matter, only the illusion of it for the benefit of those who manipulate us from the shadows and run merrily to the bank.

It’s time to make things right. First, reform our mindsets, behavior and culture. Second, cleanse the electoral bodies. Third, set the qualifications for trusteeship in public office. Fourth, only the government should spend exclusively for the candidates’ mass and social media requirements, and in exclusive designated areas, to ensure equal time, space and exposure. Fifth, ban foreign third parties from handling our elections. Sixth, ban the publication of mind-conditioning survey results. Seventh, strictly enforce the law.

The nation has thirsted so long for right-doing. It’s time for moral courage to take center stage.

 

Rafael M. Alunan served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph

Compensation Recommendation under the CG Code for PLCs

Recommendation 2.5 of the CG Code for Publicly-Listed Companies (PLCs) covers the issue of proper remuneration for the Board, thus:

Recommendation 2.5

The Board should align the remuneration of key officers and board members with the long-term interests of the company. In doing so, it should formulate and adopt a policy specifying the relationship between remuneration and performance. Further, no director should participate in discussions or deliberations involving his/[her] own remuneration.

The Code explains very well the need to change the “compensation framework” for members of the Board of Directors (BOD) from one that presumes their services to be gratuitous and non-compensable, to be properly to one that recognizes that members of the Board should be well compensated for overseeing the affairs of the company, thus:

Explanation

Companies are able to attract and retain the services of qualified and competent individuals if the level of remuneration is sufficient, in line with the business and risk strategy, objectives, values and incorporate measures to prevent conflicts of interest. Remuneration policies promote a sound risk culture in which risk-taking behavior is appropriate. They also encourage employees to act in the long-term interest of the company as a whole, rather than for themselves or their business lines only. Moreover, it is good practice for the Board to formulate and adopt a policy specifying the relationship between remuneration and performance, which includes specific financial and non-financial metrics to measure performance and set specific provisions for employees with significant influence on the overall risk profile of the corporation.”

Key considerations in determining proper compensation include the following: (1) the level of remuneration is commensurate to the responsibilities of the role; (2) no director should participate in deciding on his/[her] remuneration; and (3) remuneration pay-out schedules should be sensitive to risk outcomes over a multi-year horizon.

For employees in control functions (e.g., risk, compliance and internal audit), their remuneration is determined independent of any business line being overseen, and performance measures are based principally on the achievement of their objectives so as not to compromise their independence.

A close reading of the Code’s Explanation supports a system of professional directors for PLCs which envisions a set of professional managers and directors who spend their careers improving their managerial or industry skills and offering their services to companies whose operations are affected with public interests.

Nonetheless, by reason of the “comply or explain approach” of the CG Code for PLCs, it would mean that any attempt on the part of the BODs of PLCs to develop and adopt a competitive and performance-based remuneration structure for their directors outside of by-law provisions and/or without formal approval by the stockholders owning or representing at least a majority of the outstanding capital stock would be unlawful. On the other hand, even if the CG Code for PLCs expressly empowered Boards of publicly-held companies (PHCs) to set on the basis of the exercise of business judgment the remuneration system to attract and retain competent directors, such provisions would be unlawful and void in the same manner as similar provisions found in the Revised CG Code for being in violation with both the provisions and underlying policy of Section 30 of the Corporation Code.

REVISITING THE PROPOSED ‘BY-LAW ENABLING’ PROVISION
In my early work on the subject, I had discussed a way to empower the Boards of PHCs to provide formal provisions in their by-laws empowering their Board to set compensation framework for directors in order to comply with the express provision in Section 38 that provides that directors may receive remuneration for their services acting “as such” when it is provided for in the by-laws.

I had referred to Supreme Court decisions in Tabang v. NLRC, and in Nacpil v. International Broadcasting Corp., which held that in effect when the Corporation Code requires certain things to be found in the by-laws, then a by-law provision that grants to the Board the power to set such requirement would amount to the exercise of such enabling provision as though it had been provided expressly in the by-law itself. Thus:

The fact that the position of Comptroller is not expressly mentioned in the by-laws does not undermine the appointment to such position since under Section 25 of the Corporation Code, the BOD is authorized to appoint such other officers as it may deem necessary. In this case the by-laws provided ‘and such other officers as the BOD may from time to time deems fit to provide for. Said officers shall be elected by majority vote of the BOD.’ By-laws may and usually do provide for such other officers, and that where a corporate office is not specifically indicated in the roster of corporate offices in the by-laws of a corporation, the BOD may also be empowered under the by-laws to create additional officers as may be necessary.

Nacpil therefore confirms that an enabling clause in the by-laws of the corporation that expressly empower the BOD to create such other offices not enumerated therein, when properly invoked by the Board, makes the appointment fall under the legal definition of “corporate officer” and not entitled to the security tenure clause and all issues arising from such relationship would be cognizable by the RTC Special Commercial Courts as an intra-corporate dispute, and not within the jurisdiction of the NLRC.

The Revised SEC Code recognizes that in order to build a system of professional directors, PHCs must be able to properly offer competitive remuneration packages to those who they perceived are the best and brightest nominees available in the market, under the aegis “Quality directorship requires quality pay.” Thus, Article 3(J) of the Revised SEC Code provides that “The levels of remuneration of the corporation should be sufficient to be able to attract and retain the services of qualified and competent directors and officers. A portion of the remuneration of executive directors may be structured or be based on corporate and individual performance.”

The language in both the Original and Revised SEC Code indicate that at the cornerstone of evolving a system of professional directorship for PHCs is the need to empower their BODs to undertake and adopt competitive remuneration schemes; and that the agency code language presumes matter-of-factly that directors, both executive and non-executive, would be entitled to remuneration properly “structured or be based on corporate and individual performance.”

Yet, the scheme under the Corporation Code is that the hard work that directors as members of the BOD is non-remunerative; and that if directors are to be compensated for their work that they do as directors, the same may only be allowed by a formal resolution adopted by stockholders in a meeting called for the purpose covering a vote of at least a majority of the outstanding capital stock; or that the same be specifically provided for in the by-laws. In practical terms, public corporations do not operate under such settings, since the range of competitive remuneration is market driven and cannot be anticipated to be stable range.

In order to meet such an imperative need, and to allow BODs of PHCs to have the flexibility of being able to compete with the market for quality talents to be recruited in the Board, I had suggested that the key is to institute in their by-laws a well-worded “enabling clause” which recognizes that director’s position shall be remunerative and that the Board is granted specific power to provide for various levels and range of remuneration for directors acting in such capacity, subject always to proper disclosure and reporting to the stockholders not only in the annual report of the company, but also as an integral part of process of completing every particular remunerative resolution. However, I had cautioned in that work as follows:

This course of action however, is not without risks. Even if an enabling infrastructure for directors’ compensation is instituted into the by-laws of the corporation, it would necessarily be in static language as to provide for specific measures by which directors’ compensation may set (e.g., a range of numerals, or a certain percentage of the earnings). In other words, a general clause that would grant to the BOD the power to adopt a system of directors’ compensation even when placed in the by-laws of the company may itself be subject to vulnerability to legal attack (e.g., “The BOD are granted the power to provide by formal resolution for the compensation of directors to ensure that the corporation is able to attract and retain competent directors needed to run the company successfully.”).

The reason for this is the well-established principle in Philippine jurisprudence that any provision in the by-laws which contravene the law or public policy would be void. Therefore, a by-law provision which seeks to place power into the BOD to provide in the exercise of its business judgment to provide for compensation of directors as such, would contravene the public policy behind Section 38 of the Corporation Code, and therefore would be void.

The afore-quoted caveat has proven to the providential as affirmed in the fairly recent decision in Matling Industrial and Commercial Corp. v. Coros, where the by-laws expressly provided that the BOD “shall have full power to create new offices and to appoint the officers thereto,” and the Vice President for Finance and Administration was created pursuant to said enabling clause. The Supreme Court ruled that any officer appointed to such position does not become a “corporate officer”, but is an employee and the determination of the rights and liabilities relating to his removal are within the jurisdiction of the NLRC, and do not constitute intra-corporate controversies, thus: “A different interpretation can easily leave the way open for the BOD to circumvent the constitutionally guaranteed security of tenure of the employee by the expedient inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer position.” The Court therefore ruled that “Considering that the observations earlier made herein show that the soundness of their dicta is not unassailable, Tabang and Nacpil should no longer be controlling.”

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

 

Cesar L. Villanueva is Chair of the MAP Corporate Governance Committee, the Founding Partner of the Villanueva Gabionza & Dy Law Offices, and the former Chair of the Governance Commission for GOCCs (GCG).

cvillanueva@vgslaw.com

map@map.org.ph

http://map.org.ph

Can I talk to reporters?

By Tony Samson

WHEN JOINING a new organization, be it a company, a board, or a legislative body of twenty-four nationally elected bigshots, there is the awkwardness of trying to fit in without looking like an eager beaver. For the lower levels of new hires, mostly straight from school or with just a few years of work, companies have an orientation program that covers work hours, proper office attire, and health coverage (you need to get your own insurance for personal trips).

Newly elected officials, especially those who did not rise from the lower levels of their new positions, are clueless on what they should do. Do they ask sitting officials privately where to get lunch and how to get free gasoline? Is there the equivalent of an HR group that gives out COA-approved manuals covering such topics not covered by the university professors like how to allocate pork bellies and whether intimate friends can be appointed as staffers, in charge of “special projects”?

Is the maiden speech important, and what do you talk about? For previous winners, and current incumbents, once scoffed for their illiteracy like boxers who happen to be wealthy, was it proper in his maiden speech to quote Robert Frost (clearly a favorite of that official’s ghostwriter) and his “Stopping by woods on a snowy evening”, with its famous couplet, “and miles to go before I sleep/ and miles to go before I sleep” in reference to the legislative agenda? (I’m not making this up.) The boxer was scarcely seen after that racking up the highest absence level, until his next bout and the promises he had to keep.

Here are some thoughts on appropriate behavior for anyone just joining an august organization, and attending his first meeting.

Avoid being chatty and picking out people you know around the room with overfamiliar greetings — Bro, good to see you here. Remember when we used to take the jeepney to get massages in Binondo? A quiet demeanor and waiting to be recognized by those already established in the organization is less embarrassing. Let them recognize you — remember when we used to…Yes, it’s the establishment that will invite you into the inner circle.

Wait for the game to come to you. Discussions will inevitably lead at some point to a topic where you are recognized as an expert. When the subject of penology and recidivism come up, someone is likely to call you out — let’s see what our friend has to say about the time he spent in jail management. Conversations stop as all eyes swing on the jailbird. It’s showtime — yes, recidivism tends to drop when you introduce the death penalty.

Never ask questions just to show off, or humiliate a staffer making a presentation. (How recent are these statistics you are showing us? Are they fresh and less than one week old?) A question meant to show off reflects more on the interrogator than the one he is trying to embarrass. And what if the chair of the meeting intercedes for the presenter — let him finish his presentation before you ask you stupid question, Rookie.

It’s best to treat the first meeting as a learning experience, observing who talks a lot, who is ignored, and whether to pick siopao or siomai when served. Blending with the furniture is a good strategy. You will have your time when penology comes up again.

Reporters, who have mastered the art of the ambush interview, are especially on the lookout for the newbies. Even a seemingly soft question filled with empathy and caring can be risky to answer — so, Sir, how was your first session among the trapos? The response can range from the diffident (I am overwhelmed in the company of intellectual giants) to the arrogant (I didn’t realize they were so laidback).

Anyway, novices talking to reporters should avoid being quoted in screaming sound bites. It’s best to be bland and forgettable. With the ruling majority in the legislature, it is risky for a rookie to take personal stands on any issue, according to his moral compass — where’s it pointing now, Bud.

When asked by media about controversial topics and one’s opinion, it is best to demur, “it’s still under study and not all the facts are in at this time”. Which is another way of saying — I am still waiting for my marching orders.

 

Tony Samson is Chairman and CEO, TOUCH xda.

ar.samson@yahoo.com

Masters of mayhem

By Romesh Ratnesar

TWO AND A HALF years ago, few Spanish citizens had heard of the far-right party Vox, let alone planned to vote for it. Co-founded in 2013 by a Basque politician named Santiago Abascal, Vox fielded candidates in 10 regional parliamentary elections but failed to win a seat in any of them. In Spain’s 2016 general election, Vox received just two-tenths of 1% out of more than 23 million votes cast. The party remained shut out of every level of Spanish government.

No longer. In last December’s elections in Andalusia, Spain’s most populous region, Vox won 11% of the vote and helped oust the Socialist party from power after 36 years. It is now the country’s fifth most popular party. (In 2016, it didn’t make the top 12.) In national elections last month, Vox did less well than it had hoped — but still won 10.3% of the popular vote and 24 seats in parliament. It is one of several far-right parties in Europe poised to join the European Parliament for the first time.

Until recently, Spain’s run of solid economic growth, along with its multicultural tradition, seemed to inoculate it from the right-wing contagion spreading in other parts of Europe. In 2018, however, Spain received more migrants than any country in Europe, with most crossing from Morocco into Andalusia. That helps to explain Vox’s rise, but the party’s agenda goes beyond immigration. It inveighs against Catalan secession as much as it does against foreigners. Its leaders assail feminists and gay rights, defend gun ownership and bullfighting and call for Spain to assert sovereignty over Gibraltar. And it has capitalized on public anger at corruption scandals involving politicians from traditional parties.

The emergence of Vox highlights the reach and potency of European populism, even in countries that have long been immune to it. It demonstrates that the appeal of far-right parties is not just about Euroskepticism or restricting immigration. Voters often gravitate to populist alternatives for parochial reasons, having more to do with local grievances than with global trends.

To an extent, the disparate nature of populism has led some pro-European political leaders to underestimate the seriousness of the challenge. It’s also why trying to fashion a response remains so difficult.

European populists share some common goals. Like Donald Trump and Brazil’s Jair Bolsonaro, they aim to upend the political order, rattle elites and defend traditional culture from perceived external threats. But populism is far from monolithic. Right-wing populists like Vox and Alternative for Germany support steep tax cuts and reductions in public spending, while other anti-establishment parties that have risen to power, including Italy’s Five Star Movement and Spain’s Podemos, favor redistributive economic policies, with a heavy role for the state.

Disagreements among populists exist on how to address climate change and gay marriage. Some are openly supportive of Vladimir Putin’s Russia (Italy’s Matteo Salvini, Hungary’s Viktor Orban), while others call for confrontation (Poland’s Law and Justice party). Even on their signature issue, immigration, Europe’s populists diverge on how best to handle migrants from Africa, Asia and the Middle East. Italy’s populist government has called for new arrivals to be distributed across the bloc, rather than processed in the country in which they enter — an idea that Hungary and Poland adamantly oppose.

Unlike Europe’s established parties on the center-right and center-left, which have historic ties to institutions like trade unions and churches, populist parties lack well-defined constituencies. A 2018 study of voters in 11 Western European countries found that on a demographic and ideological basis, supporters of populist parties had almost nothing in common with each other.

To disaffected voters, however, ideological cohesion matters less than the promise of disruption. In the last decade, populists have catalyzed and benefited from the fragmentation of Europe’s party system. Two anti-establishment parties from opposite ends of the ideological spectrum, The League and the Five Star Movement, now run Italy’s government. Populists are in power in Poland and Hungary and are part of ruling coalitions in the Czech Republic, Latvia, Slovakia and Estonia.

Since 2000, the number of governments with populists in their cabinets has doubled, to at least 15 — and their ranks are likely to grow. An analysis of election results in 31 countries over the last two decades found that support for populist parties in Europe has risen from 7% in 1998 to some 25% today.

As they gain ground in national elections, populists are attempting to join forces across borders. Salvini, Italy’s nationalist deputy prime minister and interior minister, has courted Hungary’s Orban and forged an alliance with Poland’s ruling Law and Justice Party. He has also angered French President Emmanuel Macron by meeting with leaders of the yellow-vest movement, which continues to stage violent protests against Macron.

With far-right parties from Germany, Denmark and Finland, Salvini has launched a new continent-wide coalition, the European Alliance of People and Nations. France’s National Rally, led by Marine Le Pen, has joined Salvini’s alliance, as have smaller nationalist parties in southern and central Europe. Their aim was to galvanize Euroskeptic voters in advance of this week’s elections to the European Parliament and create, for the first time, a unified nationalist bloc in the 751-seat chamber.

A study by the European Council on Foreign Relations projects that Euroskeptic parties are on track to win more than one-third of the seats in the parliament. A voting bloc of that size would have the power to block regulations, overturn EU budget decisions and reshape the composition of the European Commission. It would likely seek to weaken the EU’s efforts to sanction member states for flouting democratic norms — as the current parliament has tried to do with Poland and Hungary — and reduce development aid to non-EU countries. On issues like migration, defense, cybersecurity and the environment, the increased clout of nationalist parties will make it harder for the EU to speak with a single voice.

How much long-term damage this might do to the European project is debatable. The remoteness of EU institutions makes them an easy target for populists. Yet 60% of Europeans believe EU membership is a good thing, up 13 points since 2011. While a handful of parties, like the Party for Freedom in the Netherlands, advocate their countries’ withdrawal from the EU, the vast majority of populists prefer to stay in the union. Italy’s Salvini, whose party has called the euro “the main cause of our economic decline,” has more recently dropped his threat to exit the common currency.

Disagreements over Europe could compromise the populists’ ambitions to act collectively in the Parliament — as mainstream parties across the continent (and the U.K.) have learned the hard way. And adopting obstructionist stances that stall passage of the union’s roughly 140 billion-euro annual budget, or block policy making on trade and taxation, could backfire against populist leaders if European economies suffer as a result.

All that said, the European political landscape is likely to get more turbulent, not less. Matthew Goodwin, a scholar on populism at Chatham House and the University of Kent, points to the trend of “dealignment”: the drop in the number of voters who say they feel attachment to traditional political parties. Majorities in Italy, the U.K. and France say that “traditional parties and politicians” don’t care about their problems, while 63% of voters under 24 say “new political parties and movements” are better able to find solutions than mainstream parties.

Dealignment can benefit groups on the left and right: In Germany’s regional elections last fall, the biggest gains were made by the resolutely pro-European Greens. The main effect of declining voter loyalties, however, is the creation of space for populist insurgents — like Italy’s Five Star Movement and Spain’s Vox — to vault to power, until even newer alternatives come along to replace them.

How long the upheaval lasts remains to be seen. Suffice to say, populism does not spell the end of the European Union — just the end of the EU as we know it.

Brownlee ready to lead Kings anew in Commissioner’s Cup

By Michael Angelo S. Murillo
Senior Reporter

THE IMPORT-laden Philippine Basketball Association Commissioner’s Cup kicked off at the weekend and for reinforcement Justin Brownlee of the defending champions Barangay Ginebra San Miguel Kings, he is ready to lead his team anew even as he said the field is going to be tough.

Tapped once again by the Kings to banner their campaign in the midseason PBA tournament, Mr. Brownlee said he is coming into the competition fresh and ready and that with help from the rest of the team they have a good chance of repeating as champions.

Mr. Brownlee, now on his sixth tour of duty with Barangay Ginebra since 2016, is coming off a championship stint in the Lebanese league where he helped Sporting Al Riyadi Beirut to the title.

“I feel great entering the new conference. I’m fresh and the tournament I played in previously helped me to stay in shape,” the 31-year-old Brownlee shared to members of media at the recent celebration of the 40 years of Barangay Ginebra in the PBA.

The Kings won last year’s title by beating the San Miguel Beermen in six games in their best-of-seven finals series.

Mr. Brownlee was a replacement import last season, taking the place of Charles Garcia in the elimination round and the team just picked things up from there all the way to the title.

After their victory though, the Kings struggled to advance past the semifinals and quarterfinals, respectively, in each of the next two conferences, something Mr. Brownlee said only adds further fuel for them to do better this time around.

“We are ready to defend the title and bounce back after the loss last conference and the Governor’s Cup before that,” said Mr. Brownlee, who has helped the Kings to three PBA titles in the last eight conferences.

The Barangay Ginebra import went on to say that they will be facing a tough field, boasting of a solid mix of teams which have brought in quality imports to help their causes, and that they have to be ready.

“I have seen some of the imports and, man, they are good. It’s going to be tough this conference. I’m the shortest of the imports but with help from Japeth (Aguilar), Joe (Devance) and Greg (Slaughter) I believe we can make manage. I have faith in my team,” he said.

Now on his sixth time playing for the Kings, Mr. Brownlee said his commitment with them has only gone stronger.

“It feels great. I mean to be wanted by a great organization like them is definitely a blessing and it’s an honor to be part of the team. It’s very special for me,” he said.

Mr. Brownlee and the rest of the Kings will make their 2019 tournament debut on Friday, May 24, against the Blackwater Elite.

Koepka survives to win PGA after crowd sense a collapse

ARMINGDALE, N.Y. — A coronation almost turned into a calamity but Brooks Koepka survived to win the PGA Championship for a second consecutive year on Sunday and establish himself as golf’s new top dog.

The American, who had held a seven-stroke lead at the start of the final round, almost lost control of the title when he made four successive bogeys from the 11th hole before staving off Dustin Johnson for a two-stroke victory at Bethpage Black.

Koepka shot a four-over-par 74 to finish at eight-under 272 and captured his fourth major title in his last eight starts in grand slam events.

Johnson (69) was second on six-under, with Americans Jordan Spieth and Patrick Cantlay and Britain’s Matt Wallace four strokes further back tied for third.

What had seemed for much of the tournament to be a coronation almost became a calamity on Sunday, to the delight of most of the raucous New York gallery, who were openly cheering against Koepka as he walked off the 14th green with a tenuous one-stroke lead.

He has played with a chip on his shoulder his entire career, and hearing chants in his face of “D.J., D.J.” only served to fire him up as he walked down the steep hill and across Round Swamp Road to the 15th tee at Bethpage Black.

Johnson was playing the adjacent 16th hole when the chants went up after Koepka’s mini-collapse.

“I wasn’t nervous. I was just in shock at what was going on,” Koepka said. “When they started chanting D.J. on 14, it actually kind of helped.

“That was probably the best thing that could have happened … helped me refocus and hit a good one down 15.”

Koepka’s playing companion Harold Varner III, however, was annoyed by the crowd reaction.

“I thought it was pretty weird how they were telling Brooks to choke,” Varner said.

“That’s not my cup of tea. I was pulling for him after that. I have a few choice words for that. Just cheering for him to do bad, I just don’t get that.”

Johnson, however, subsequently bogeyed the 16th after misjudging his approach shot in the strong and gusty winds and the lead was back up to two strokes.

In becoming the first champion to lead wire-to-wire since Hal Sutton in 1983, Koepka successfully defended his title and also displaced Johnson as world number one.

Koepka, who also won back-to-back US Open titles in 2017-18, admitted his run of bogeys had put him under pressure.

“Tell you what, the hour spent from number 11 to 14 was interesting,” Koepka said. “I just got stuck in a bogey train. I just made mistakes at the wrong time.

“You’ve got to hit good drives and I put it in the rough. I challenge anyone to play this course in 15-to 20 miles-per-hour winds and see what they shoot.”

“Today was definitely the most satisfying out of all of them for how stressful that round was, how stressful D.J. made it.

“I know for a fact, that was the most excited I’ve ever been in my life … on 18.” — Reuters

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