Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 9792

Brazil import quota for US wheat could come with Bolsonaro visit

WASHINGTON — Brazil is considering granting an import quota of 750,000 tonnes of U.S. wheat per year without tariffs in exchange for other trade concessions, according to a Brazilian official with knowledge of the negotiations ahead of President Jair Bolsonaro’s visit to Washington.
That is about 10 percent of Brazilian annual wheat imports and is part of a two-decades-old commitment to import 750,000 tonnes of wheat a year free of tariffs that Brazil made during the World Trade Organization Uruguay Round of talks on agriculture but never adopted.
Bolsonaro is scheduled to arrive in Washington on Sunday and meet with U.S. President Donald Trump at the White House on Tuesday.
Farm state senators have asked that wheat sales be on the agenda, in a letter to Trump seen by Reuters. They estimate such a quota would increase U.S. wheat sales by between $75 million and $120 million a year.
Brazil buys most of its imported wheat from Argentina, and some for Uruguay and Paraguay, without paying tariffs because they are all members of the Mercosur South American customs’ union. Imports from other countries pay a 10 percent tariff.
The Brazilian official, who asked not to be named so he could speak freely, said the wheat quota could be sealed during a meeting between Brazil’s Agriculture Minister Teresa Cristina Dias and U.S. Secretary of Agriculture Sonny Perdue on Tuesday.
In return, the Brazilian government is hoping to see movement toward the reopening of the U.S. market to fresh beef imports from Brazil that were shut down after a meat-packing industry scandal involving bribed inspectors.
Brazil is also seeking U.S. market access for its exports of limes that are facing phytosanitary certification hurdles.
The world’s largest sugar producer also wants tariff-free access to the U.S. market. But Washington is not expected to budge on that issue until Brazil lifts a tariff it slapped on ethanol imports when they exceed 150 million liters in a quarter.
That is a major demand by U.S. biofuels producers who are the main suppliers of ethanol imported by Brazil. — Reuters

Allianz SE eyes Deutsche asset management arm

ALLIANZ SE is exploring the possibility of a combination of its asset management arm with Deutsche Bank AG’s DWS Group to create a national champion in active money management, according to people familiar with the matter.
The Munich-based insurer is looking at the feasibility of a deal with Germany’s largest lender to create a business with €1.17 trillion ($1.33 trillion) under management, said the people, who asked not to be identified discussing the private matter. Allianz’s deliberations are at an early stage and may not lead to any formal talks or agreement, the people said. DWS is one of Deutsche Bank’s crown jewels and the lender is reluctant to sell its holding in the stock-listed unit, one of the people said.
Still, such a transaction could help Deutsche Bank finance a merger with Commerzbank AG. The lender would have to come up with about €8 billion for restructuring expenses and revaluation of certain assets should it decide to combine with its cross-town rival, according to Christian Koch, a DZ Bank analyst. DWS has a market cap of €5.6 billion, valuing Deutsche Bank’s 78% stake at about €4.3 billion.
Deutsche Bank has already tapped shareholders for about €30 billion this decade, making the sale of an asset like DWS potentially more palatable. Representatives for Deutsche Bank, Allianz and DWS declined to comment.
Any sale of DWS could also attract interest from other firms looking to bolster their asset management business, including Amundi SA, Europe’s largest asset manager, UBS Group AG and Morgan Stanley. Amundi, majority owned by Credit Agricole SA, would take a look at DWS if it became available, according to people briefed on the matter. An Amundi representative declined to comment.
Deutsche Bank may need to sell its DWS stock for at least €32 per share to avoid a writedown on the value booked on the lender’s balance sheet, according to people familiar with the information. The stock closed on Friday at €27.95.
A combination of DWS, which oversees €662 billion, and German active money manager Allianz Global Investors, with €505 billion, would create a German champion in asset management.
For asset managers seeking scale — and there are a lot these days — a sale of DWS would present a rare opportunity for a large deal. The firm has one of Europe’s biggest offerings of exchange traded funds, as well as a sizable real estate business. — Bloomberg

Melissa launches collection with Sanrio’s Hello Kitty


Brazilian shoe brand Melissa has launched a collection with one of the most recognizable cats in the world, Hello Kitty, in a line which is said to blend the charming, be-ribboned Hello Kitty aesthetic with the sophisticated style of the footwear brand for a “cute-meets-chic” balance between form and function. The collection features sneakers, ballet flats and slippers. The Melissa x Hello Kitty collection is available online at www.melissaphilippines.com starting March 15, and in select Melissa Shoes outlet stores nationwide starting April 1.

Shares seen sideways as gov’t cuts growth goal

SHARES MAY continue to trade sideways in the week ahead as investors digest the government’s decision to cut growth targets.
The benchmark Philippine Stock Exchange index (PSEi) climbed 0.61% or 47.86 points to 7,798.28 last Friday. Last-minute buying allowed the index to register gains on a weekly basis, although only minimally at 0.02%. The services counter’s 1.83% weekly gain was offset by a 1.6% drop in holding firms.
Average turnover for the week increased by 42% to P8.54 billion as Friday’s P21-billion turnout lifted the thin trading that settled just above P5 billion for most of the week. Net foreign buying averaged at P280 billion, versus a net selling position of P59 million in the week before.
“The main index may continue to trade between the trading range between 7,600 and 7,900 in the coming weeks,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.
Mr. Mangun noted how the government last week cut its 2019 gross domestic product (GDP) growth target to 6-7% from 7-8% previously due to delays in approving the National Expenditure Program.
Socioeconomic Planning Secretary Ernesto M. Pernia said last week that operating on a reenacted budget will likely stunt GDP growth to as low as 4.2-4.9% this year versus the country’s 6.2% growth last year.
“Investors may have been expecting this, thus the cautious sentiment,” Mr. Mangun added.
Meanwhile, growth is seen picking up to 6.5-7.5% in 2020 before rising to 7-8% in 2021 and 2022.
On the other hand, the economic team retained their inflation forecast at 3-4% this year and 2-4% annually until 2022, confident that price increases will go back to normal from last year’s surge.
Online brokerage 2TradeAsia.com added that investors will be looking at results of the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) happening this week.
The Federal Open Market Committee will convene on March 19-20, while the BSP policy review will follow on March 21.
“The likelihood for a status quo on the Fed rate is gaining ground, especially with the recent weakness in select key spending data in the US. At home, several players are starting to price in a cut in the reserve requirement from the new BSP chief, a move that should help induce lending to support capital rollout,” 2TradeAsia.com said in a weekly market note.
The online brokerage said risks are still present for local equities as the Senate and House of Representatives have yet to approve the national budget. Both houses of Congress are currently on recess. The session will resume on May 20 until June 7.
“Efforts must also be made in addressing the water shortage dilemma, on top of countering efforts to mitigate El Niño’s impact on agriculture,” 2TradeAsia.com said.
Eagle Equities’ Mr. Mangun placed the PSEi’s support at the range of 7,600 to 7,700, while resistance is from 7,900 to 8,000. — Arra B. Francia

How PSEi member stocks performed — March 15, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, March 15, 2019.
psei031519
 
Philippine Stock Exchange’s most active stocks by value turnover — March 15, 2019.
pseiactive031519

Special session may herald possible budget compromise

THE Senate’s proposal to hold a special session for the approval of a supplemental budget is a “workable compromise” to settle the impasse over the 2019 national budget, an analyst said Sunday.
The Senate last week asked the House of Representatives to recall the 2019 national budget, signed by Speaker Gloria Macapagal-Arroyo, which it transmitted on March 11.
“We only suggest it if the House recalls what they sent and resend what we approved in the plenary. Then in case the President vetoes the lump sum, we can go into a special session to approve a supplemental budget,” Senate President Vicente C. Sotto III said in a phone message to BusinessWorld, Saturday.
He noted this has been relayed by Senator Panfilo M. Lacson to the House, through San Juan Rep. Ronaldo B. Zamora. When asked whether there has been any development since, Mr. Sotto said “none yet.”
Mr. Zamora, for his part, said in a phone message, Sunday, “there is nothing yet to report. We have finished some preliminary issues, but there are still large gaps to bridge between the versions of the two Houses of Congress.”
“We will, at all costs as soon as we can, have a budget for 2019.”
Ateneo Policy Center research fellow Michael Henry Ll. Yusingco said via e-mail Sunday that “this week, Senate’s proposal could be the likely way out of this budget deadlock.”
“The Senate’s suggestion to hold a special session for a supplemental budget to accommodate the House’s position looks like a workable compromise. Initial reactions from some Congressmen to this proposal are not encouraging. But this weekend may have given our lawmakers the time to reconsider the backlash if they remain intransigent. They could enter this week with a softer attitude towards each other,” he said.
Dr. Perlita M. Frago-Marasigan, a University of the Philippines Political Science assistant professor, said if the House maintains its position, “the deadlock may continue until after the mid-term elections.”
“Two, the government projects will be funded by a reenacted budget. Third, the path of least resistance might be chosen. The Senate usually bases its decision on popular support,” she said in a phone message on Sunday.
Both analysts said any more delay in the budget enactment will have a severe impact on the economy. “The planned infrastructure projects will have no funds and therefore cannot proceed as planned. This is just one outcome our lawmakers must not trivialize,” Mr. Yusingco said, adding that health and social welfare services will also suffer.
“We need the new budget passed soon. This is the bottom line,” he added.
The House has been firm in its insistence on “itemizing” the P3.757-trillion budget following its ratification by both chambers on Feb. 8. The House has argued that keeping some funds in lump sum form, as approved in the committee report, makes the budget prone to corruption.
When asked what it sees as a possible compromise, given the opposing positions, House Majority Leader Fredenil H. Castro of the 2nd district of Capiz merely said the Senate should sign the transmitted budget.
“The House has done its obligation. It has forwarded to the Senate the Enrolled Bill duly signed by the Speaker,” Mr. Castro said in a phone message Sunday. “It’s now the turn of the Senate to comply with its obligation by signing the Enrolled Bill and transmit it to the President for his signature.”
Meanwhile, in a statement on Sunday, appropriations committee chair Rolando G. Andaya, Jr. of the 1st district of Camarines Sur said the Budget itemized by the House will “not cripple” President Rodrigo R. Duterte’s “Build, Build, Build” program, contrary to claims made by Mr. Lacson.
“What may stall the acceleration of infrastructure spending was the Senate’s unilateral decision to remove P17 billion for the right-of-way funding of BBB projects,” he said in a statement. — Charmaine A. Tadalan

Foreign debt rises 8%

OUTSTANDING foreign debt rose 8% in 2018 as companies and the national government resorted to foreign sources for funding, the Bangko Sentral ng Pilipinas (BSP) said.
External debt grew to $79 billion at the end of 2018 from the year-earlier total of $73.1 billion, the central bank said late Friday.
Last year, the government borrowed $3.5 billion from external creditors, while the private sector availed of $3.2 billion worth of overseas loans.
The government’s external debt rose to $39.7 billion at the end of 2018 from $39.5 billion at the end of the third quarter. Its share of total external debt declined to 50.3% from the previous quarter’s 51.8%.
Meanwhile, the private sector’s overseas obligations “substantially” increased to $39.3 billion at the end of the year from the end-September level of $36.9 billion, with its share of the total increasing to 49.7% from the previous quarter’s 48.2%.
The central bank attributed the year-on-year growth of external debt to the government’s increased financing needs for its infrastructure and social spending programs.
Banks were also preparing for the higher liquidity coverage ratio threshold prescribed by the Basel 3 reform package issued by the Basel Committee on Banking Supervision, while also seeking additional funding for their purchases of Philippine sovereign debt.
The central bank also attributed the higher foreign debt to the private sector’s increased working capital needs, expanded funding base and extended term liabilities.
External debt refers to all types of borrowing by Philippine residents from non-residents, following the residency criterion for international statistics.
In the fourth quarter, outstanding foreign debt rose 3.3% compared with the end-September level of $76.4 billion.
At the end of 2018, the maturity profile of the foreign debt remained predominantly medium- to long-term (MLT) in nature, or those with original maturities longer than one year, accounting for 79.7% of the total or $62.9 billion.
Meanwhile, short-term accounts comprised 20.3% of the debt stock, mainly bank liabilities, trade credits and others.
“The weighted average maturity for all MLT accounts remained at 17.0 years in December 2018, with public sector borrowings having a longer average term of 21.3 years compared to 7.7 years for the private sector,” the BSP said.
“This means that FX requirements for debt payments are well spread out and, thus, more manageable.
Japan was the biggest creditor at $14.4 billion. This was followed by the United States ($4 billion), the Netherlands ($3.6 billion) and the UK ($3.2 billion).
Obligations to foreign banks and other financial institutions accounted for the largest share of outstanding debt at 33.6%.
Loans from official sources stood at 31.2%, broken down into multilateral creditors (17.4%) and bilateral creditors (13.8%).
Bilateral loans amounted to $10.9 billion, with Japan providing $7.9 billion, China $772 million and Germany $426 million.
Foreign debt remained largely dollar-denominated at 61.1% while yen debt accounted for 13.2%.
The BSP also said the debt service ratio — a measure of the adequacy of foreign exchange earnings to meet maturing debt obligations — was 6.3% at the end of 2018 from 6.2% a year earlier.
The external debt ratio — or total outstanding debt as a percentage of Gross National Income — measures solvency. It grew to 19.9% at the end of September from 19.4% a year earlier, indicating the country’s “sustained strong position” to service offshore borrowings in the medium to long term. — Karl Angelo N. Vidal

Cement importers say products meet gov’t norms

IMPORTERS disputed claims that their cement fails to meet regulatory standards, noting that Vietnamese cement in particular meets government standards.
“All legally-imported cement retailed in the Philippine market is guaranteed to meet stringent quality controls. Our members import cement from various countries, including Vietnam. But wherever imported cement is sourced, we wish to stress that imported cement undergoes a three-tier quality control procedure mandated by (Department of Trade and Industry),” the Cement Importers Association of the Philippines (CIAP) said in a statement over the weekend.
According to news reports and online rumors, substandard Vietnam-sourced cement is proliferating in Philippine markets.
CIAP said quality controls imposed by DTI on imported cement are more stringent than those for domestic cement, whose manufacturers undergo one annual audit.
“Although the ideal situation is for unannounced audits, local manufacturers undergo only once-a-year audits and the audits are even announced and mutually scheduled. In other words, cement products of local manufacturers are tested only once a year,” CIAP said.
“On the other hand, for imported cement, each and every batch is tested by the DTI. If there is more than one batch in one shipment, we are required to provide samples for each batch for DTI to test,” it added.
The group noted that repeat orders from customers who have used imported cement for their projects show that “imported cement can be far superior to locally-manufactured cement.”
Under DTI Department Administrative Order (DAO) 17-06 issued in 2017, cement can only be imported from manufacturing plants that have been pre-screened and have passed stringent accreditation standards, which is the first stage of DTI’s quality control procedures.
Upon accreditation, foreign plants are given a Philippine standards (PS) quality mark and/or a safety certification (SC) mark. All cement destined for the Philippines must carry the PS or SC mark on the packaging.
On behalf of DTI, accreditation is undertaken by international organizations such as Société Générale de Surveillance or TUV Rheinland, among others, which conduct factory and product audits to ensure compliance with Philippine standards.
Upon arrival at Philippine ports, imported cement undergoes post-shipment inspection and testing for quality confirmation conducted respectively by the Bureau of Customs and the DTI.
The Philippines has seen a surge in cement imports in recent years due to rising demand, which CIAP claims cannot be met by domestic manufacturers.
CIAP members account for more than 50% of the volume of cement imports. — Janina C. Lim

DoLE to sign labor deal with Japan for at least 100,000 specialized jobs

THE Department of Labor and Employment (DoLE) said it will sign an agreement with Japan on Tuesday that could result in at least 100,000 workers with specialized skills, including caregivers.
Labor Secretary Silvestre H. Bello III said that he will fly to Japan to sign a new bilateral following the adoption of a new immigration policy for foreign workers. The memorandum of cooperation will be between DoLE and Japan’s Ministries of Justice, Foreign Affairs, Health, Labor and Welfare and the National Police Agency.
“Signing will be on the 19th,” he told reporters.
The new immigration policy will take effect next month, which marks the start of Japan’s fiscal year. New work visas will be issued under the category “Specified Skilled Worker.”
The 14 specified sectors prioritized by the new policy are care workers; building management specialists; machine parts and tooling craftsmen; industrial machinery operators; workers in the electrical, electronics, and information sector; construction workers; ship building and ship machinery workers; auto repair and maintenance workers; aviation workers; accommodations specialists; agriculture workers; fisheries and aquaculture workers; food and beverage manufacturing specialists; and food service workers.
The agreement between Japan and DoLE makes available a substantial share of the 350,000 available jobs under the new law, with Filipinos considered a preferred nationality for the program.
In a statement on Sunday, Mr. Bello said: “This agreement, aside from providing better opportunities, is geared toward ensuring their protection by means of implementing a basic framework that will promote smooth and proper mechanisms in sending, accepting, and residence management of incoming specified skilled workers in Japan,” he said. — Gillian M. Cortez

CTA en banc upholds San Miguel refund decision

THE Court of Tax Appeals (CTA) rejected a Bureau of Internal Revenue (BIR) appeal against an excise tax refund claim filed by San Miguel Brewery, Inc. in connection with its San Mig Light brand amounting to P761 million.
In a three-page resolution on March 8, the CTA, sitting en banc, denied for lack of merit the BIR’s motion for reconsideration.
“A careful perusal of the petitioner’s Motion for Reconsideration shows that the arguments raised therein are a mere reiteration of matters which have already been specifically considered, weighed and resolved in the assailed Decision,” the CTA ruled.
“Finding no compelling reason to reconsider, modify or reverse our decision, we shall no longer belabor in this Resolution, to repeat the disquisitions made therein,” it added.
The BIR argued that San Miguel Brewery Inc., a subsidiary of listed San Miguel Corp. (SMC), is not entitled to a tax refund and the court has no jurisdiction over the company’s petition.
In its Oct. 11, 2018 decision, the CTA upheld the decision of its second division in June 2017 that San Mig Light is a new brand and not a variant of an existing product, and thus, “subject to the excise tax rate of P15.49 per liter instead of the P20.57 per liter.”
San Miguel Brewery said that it started paying P20.57 per liter on excise tax for San Mig Light products in 2012, when it should have been paying P15.49.
In ruling that the product is a new brand, the court cited a Supreme Court decision which states that a variant carries the same logo or its name is formed by either a prefix or suffix of its parent brand.
The CTA also said that “San Mig Light” was registered as new brand on Oct. 27, 1999 and was listed in the “Master List of Registered Brands of Locally Manufactured Alcohol Products” as new brand. It also said that SMC received a letter from the BIR Large Taxpayers Assistance Division II Acting Chief Conrado P. Item on Feb. 7, 2002 confirming that the product was registered as a new brand.
The BIR on May 28, 2002 issued a notice of discrepancy to SMC stating that “San Mig Light” is a variant of an existing beer product. — Vann Marlo M. Villegas

A New Green Revolution: Green Bonds

(First of two parts)
The Philippines’ GDP growth has maintained a relatively stable upward trend over the last decade. Regionally, the archipelago continues to outpace most of its neighbors, maintaining an average annual growth rate of six to seven percent in the last seven years. The driving force behind this economic and developmental progress is the reinvigoration of the national government’s investment in public works, health and education infrastructure, and improved public financial management. However, the effort and resources expended towards the modernization and overall development of the Philippines still falls short in one key consideration — climate and environmental resilience and the sustainability of these infrastructural pursuits, and of the overall development and growth path of the country in its entirety.
Post-liberation, the Philippines has followed traditional development pathways that — while conducive to basic economic objectives of expansion and growth — are inherently unsustainable to the landscape and the environment. As of 2018, the manufacturing sector has contributed over a quarter of all value generated within the economy. Partnered with the increased activity in infrastructure development, and the resulting rising demand in land, resources, and energy, the economic activity of the country continues to exacerbate the environmental burden of sustaining day-to-day operations.
Despite maintaining the lowest ecological footprint among its neighbors in Southeast Asia, the rapidly-growing incidence of overconsumption, unregulated production, and lack of a solid waste management framework have significantly amplified the population’s strain on the country’s natural carrying capacity.
Since the 1960s, the country’s resource demand has more than doubled, and the resulting Greenhouse Gas (GHG) emissions have grown by a whopping 67% since 2007. Waste management remains another critical shortcoming. As of 2015, the Philippines has become the third-largest source of plastic pollution, directly affecting the rapid degradation of local marine life. A more direct and dire consequence of waste management malpractice is experienced during typhoon season, where major flooding across cities becomes a common and unfortunate occurrence. Linked to that are several other issues in energy, transportation, resilience, agriculture, and overall social and environmental welfare.
Although bleak, it is certainly not too late to turn the tide against this lack of environmental awareness and integration. A hopeful study carried out by the United States Agency for International Development (USAID) shows that despite the rapid growth in GHG emissions, emission levels were just over a third of GDP growth for the same period, indicating the potential for notable improvements in the future. The responsibility of this environmental and climate change rehabilitation will need to fall on the collective shoulders of the public sector, private corporations, and most importantly, the citizens themselves.
On that note, the most impactful and sustainable approach to environmental protection, climate change mitigation, and adaptation, often begins at the grassroots level — within organizations, localized communities, and even at the Local Government Unit (LGU) level. The bottom-up approach starts off simple, but it ultimately allows the target beneficiaries to create sustainable solutions that are tailored to their particular needs and context. The lack of financing, however, limits the potential for green growth and development.
As an example, financing for LGU-led projects is sourced predominantly from government Internal Revenue Allotments (IRAs), which, depending on the size of its municipalities, make up 50-70% of their respective budgets. In response, the Department of Finance has been urging the Bureau of Local Government Finance to take more steps in strengthening LGU fiscal autonomy.
At the moment, the push directing Public-Private Partnership and Overseas Development Assistance financing towards local governments has significantly increased funding pipelines for LGU-initiated projects. There is an opportunity to further accelerate this through the use of green bonds as an alternative funding source, which in turn can foster self-reliance and project autonomy. Through this, the investment can empower the community to learn, do, and offer more, leading to great growth potential. Within the private sector, green bonds may help incentivize the correction of negative environmental externalities within established operations, such as in energy efficiency improvements, pollution controls, and energy mix diversification. As most of these pursuits emphasize impact over profit, traction for their growth has been weak, in spite of the obvious benefits and pressing need for active action in striving for green infrastructure.
In the second part of this article, the discussion will delve towards the structuring of green bonds as well as further opportunities for local adoption.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.
 
Hemant M. Nandanpawar is a Senior Director and Arielle Nicole R. Papa is an Associate of SGV & Co., respectively.

Realizing universal health care through sin taxes

As May elections draw near, legislators are faced with the daunting task of reflecting upon — and marketing — their legacies. Two candidates of note are Senator Sonny Angara and Senator JV Ejercito, both of whom authored bills instituting universal health care in the Philippines. President Duterte signed Republic Act No. 11223, the Universal Health Care Act, in late February 2019.
Universal health care or UHC aims to transform the Philippine health system. By comprehensively reforming how health is financed and how services are delivered, UHC affirms every Filipino’s right to health and aims to make quality care accessible to all.
The journey to passing UHC legislation has been a long one. The health advocates — spanning the medical community, academics, and activists — know that the fight is far from over. The dream comes with costs. And if legislators want to secure their legacy, much remains to be done to shoulder the costs.
SUSTAINABLE FUNDING FOR UHC
Make no mistake about it. UHC stands to become one of the greatest achievements of recent Philippine legislation. Wherever one’s political sympathies lie, it is difficult to deny that UHC represents a victory for Filipinos across the nation, especially the poor and those living in far-flung provinces long deprived of access to even basic services.
In a country where average out-of-pocket expenses constitute more than half of health expenditures, UHC assures free basic services for all Filipinos. Focusing on primary care further shifts costs downward as preventive and promotive take precedence over curative procedures, which are more costly to perform. Where for years, 70% of Filipinos have died without medical attention, UHC revitalizes both health facilities and the health workforce, requiring that every barangay and municipality is organized in service delivery networks with adequate doctors, nurses, midwives, health centers, and the necessary technology for inter-communication and smooth transition of medical records. Amid doubts (to put it lightly) surrounding the Dengvaxia issue, UHC institutes stronger terms for health technology assessment, ensuring rigorous standards for all medicines and procedures that will be introduced into the Philippine health system.
health sin tax
But to realize the dream of UHC, the Department of Health has cited a total cost of Php 257 billion in the first year of implementation. More than the immense costs of setting up a UHC-ready health system, the effects of continued population growth and annual inflation will require consistent funding over the years to come. Thus, lawmakers need a sustainable source of funding that assures lasting support of the health system that works for all Filipinos.
TRIED AND TRUE: SIN TAXES THE WAY TO GO
Since their implementation in 2012, taxes on tobacco and alcohol products generated enough revenue to triple the Department of Health’s budget. Smoking prevalence, on the other hand, went down from a third of the population to about a quarter. Sectors with the most reduced smoking were the youth and the poor. Sin taxes have thus consistently led to substantial health financing on top of direct health effects, with such benefits amplified among the most vulnerable populations.
What’s more: Senators JV Ejercito, Win Gatchalian, and Manny Pacquiao have already filed bills for increasing the tobacco tax to Php 90, Php 75, and Php 60 per pack, respectively. With the rates proposed, new revenue from sin taxes is projected by the Department of Finance to reach Php 25.9 billion (Ejercito), Php 33.8 billion (Gatchalian), and Php 30.1 billion (Pacquiao) in the first year alone. That’s a sizeable chunk of the UHC costs well accounted for. This incremental sum is likewise an essential component in the DOH’s own accounting for the costs of UHC.
The research has been done, the funds found substantial, and the legislation ready for discussion. So one must ask: What’s stopping us from taking the necessary steps to make UHC a reality? Perhaps, in the delicate atmosphere of the elections, the politicians do not wish to send the wrong signal to voters — or the tobacco industry?
UHC LEGISLATORS: DON’T SETTLE FOR HOLLOW LEGACIES
Yet in refusing to do the heavy lifting needed to realize UHC, the same legislators send their own signals of deficiency. UHC may become a centerpiece of their CVs or official profile pages as a legacy of their senatorial tenure. But they will remain hollow legacies. Empty. That is, if at the end of the day, without the necessary funds, they continue to reap the symbolic benefits of “fathering” UHC, while families around the country suffer from our broken health system. The UHC they father will be stillborn.
At this juncture, however, it is not too late. When the dust clears from the elections, legislators will face a strong test of their comm-itment to real change, of creating a legacy that will last. Health advocates — as well as every Filipino — will be keeping close watch.
Senators: You’ve signed your name onto the bills. You’ve tacked kalusugan onto your catchy monikers and tarps. You’ve had your photo ops with Filipinos from communities nationwide. You’ve made them promises as numerous and grand as your ambitions of another term. Do more now than make promises. Keep them.
 
Joshua Uyheng is a PhD student in societal computing at Carnegie Mellon University. He was formerly a research associate of Action for Economic Reforms specializing in fiscal and healthcare policy.

1...9,7919,7929,793...12,801Page 9,792 of 12,801
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube