Oslob resort owners volunteer to demolish ‘illegal’ structures

March 4, 2020 | 8:06 pm

RESORT OWNERS and residents in Oslob, a southern Cebu town popular for whale shark watching, have committed to voluntarily demolish parts of their structures that have encroached the easement zone. In exchange for their pledge, the 20-meter easement zone has been cut back to three meters. Last Monday, Governor Gwendolyn F. Garcia, along with regional directors from the Department of Environment and Natural Resources (DENR), Department of Tourism (DoT), and representatives from the Provincial Environment and Natural Resources Office (PENRO), met with residents of four coastal villages to discuss their compliance to the easement zone. Under the 20-meter standard, 420 structures, both residential and commercial, have been found in violation of the zoning law. Of these, 157 are commercial establishments and the rest residential.

URBAN
Article 51 of the Water Code of the Philippines prohibits the building of infrastructure within specified easement zones. “The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three meters in urban areas, 20 meters in agricultural areas and 40 meters in forest areas, along their margins, are subject to the easement of public use in the interest of recreation, navigation, floatage, fishing and salvage,” the provision states. “No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, floatage, fishing or salvage or to build structures of any kind.” It was agreed during the meeting that the coastal villages meet the requirements to be classified as urban barangays. For a barangay to attain an urban classification, it must have a population of 5,000 residents, host a commercial establishment with 100 employees or five commercial establishments with at least ten employees each. The four barangays are the first of 15 in Oslob to have completed the inspection and inventory of establishments. — The Freeman

MinDA partners with Pilmico for sorghum program

March 4, 2020 | 8:05 pm

THE MINDANAO Development Authority (MinDA) has tapped Pilmico Foods Corp. to help with the marketing strategy for the Sorghum Development Program that aims to develop about 100,000 hectares for the crop. Pilmico Assistant Vice President Glen L. Banogon, in a statement released by MinDA, said the country’s sorghum requirements have been mostly imported and producing it locally will benefit the livestock and poultry industries. “The three main considerations for sorghum are its nutritional value, availability and cost. There’s a big potential here, with DA (Department of Agriculture) and MinDA’s assistance and facilitation in the cultivation process and Pilmico’s help in the market aspect,” said Mr. Banogon. Pilmico, an Aboitiz company, is engaged in feeds for aquaculture, livestock, and poultry. He explained that sorghum seeds can be used as feeds for fish, duck, chicken, and hogs while the stalks can be used as silage for goats and cattle. “If we are successful with this, we will be able to bring down the cost of feeds allowing us to compete with imported goods, therefore increasing income and alleviating poverty with focus and consistency,” MinDA Chair Emmanuel F. Piñol said.

8 PROVINCES
The sorghum program will focus on developing marginal lands and ancestral domains to hit the target area by 2021. Eight provinces have been identified as initial participants and will receive seeds from the 25-ton stock donated by an American company. The provinces are: Davao del Norte, Cotabato, Sarangani, Zamboanga Sibugay, Lanao del Sur, Bukidnon, Agusan del Sur, and Basilan. “We will orient you (beneficiaries) on what you could do with the crop, how the LGUs (local government units) could assist in the financial aspect, and MinDA on its part, will be reaching out to our funding agency partners and also link you up with a ready market,” Mr. Piñol told the first batch of beneficiaries during an orientation session in Davao City last Monday. MinDA said the projected income from the program is P15 billion annually. — Carmelito Q. Francisco

Davao City business chamber proposes permanent agri inspection and disinfection stations

March 4, 2020 | 8:04 pm

A QUARANTINE CHECKPOINT set up by the Davao Occidental province following the African Swine Fever outbreaks in Davao del Sur and Davao City starting late January. — *DAVAO OCCIDENTAL PIO*

THE DAVAO City Chamber of Commerce and Industry, Inc. (DCCCII) is proposing the establishment of permanent inspection and disinfection stations in the Davao Region to mitigate and address concerns such as the recent outbreak of African Swine Fever (ASF) and related threats to livestock, poultry and crops. The group, in its second board of trustees meeting last February 20, passed a resolution to discuss the proposal with the Department of Agriculture (DA). DCCCII Vice President for Industry Cherrylin B. Casuga, in a statement on Wednesday, said such permanent facilities will help ensure biosecurity for both crops and livestock. “This is a good way of containing the possible spread of such virus. The earlier we contain these outbreaks, the better for our agribusiness companies,” she said. DCCCII President John Carlo B. Tria said they will be initiating the discussions and work closely with the DA on implementing the proposal. “We will be sending a copy of this resolution to Secretary William Dar and work with the government to help implement this,” he said.

Nationwide round-up

March 4, 2020 | 8:03 pm

DTI eyes mentoring program for cooperatives

THE DEPARTMENT of Trade and Industry (DTI) is looking into the adoption of its mentoring program for cooperatives as it absorbs the agency overseeing the sector’s promotion and growth. DTI, in a statement on Wednesday, said it supports Senator Juan Miguel F. Zubiri’s suggestion for the department to create programs wherein large cooperatives will coach newly-formed and smaller cooperatives. The Cooperative Development Authority (CDA) became an attached agency of the DTI in February based on Executive Order 67, which provides for the integration of programs and activities for cooperatives. The integration also follows Republic Act No. (RA) 11364, the Cooperative Development Authority Charter of 2019. DTI’s Kapatid Mentor Me Project connects large corporations to micro and small enterprises for mentoring on business operations. The department also has the Shared Service Facility program, wherein micro entrepreneurs can access facilities built in their community. “Cooperatives are one of our many partners in supporting the development of Micro, Small, and Medium Enterprises. That’s why we are thankful for the proposal that the CDA should bring our mentoring program to the grassroots level through cooperatives,” DTI Secretary Ramon M. Lopez said. — Jenina P. Ibañez

Senators lambaste police, agencies over unsolved BuCor murders

SENATORS ON Wednesday slammed the Philippine National Police (PNP), among other government agencies, for failure to solve the killings of 16 Bureau of Corrections (BuCor) officers in the last nine years. A hearing, led by the Senate committee on justice and human rights, found that none of the 16 cases since 2011 have been solved due to the inaction of the PNP, BuCor and the Department of Justice. “There’s lack of urgency, there’s complacency, lack of professionalism, lack of caring for people who have been murdered,” Senator Richard J. Gordon said in a briefing. The committee held the probe following the death of former BuCor legal officer Frederick Santos on February 19. Mr. Santos was shot by riding-in-tandem criminals. The National Bureau of Investigation has yet to access the dashboard camera from Mr. Santos’ vehicle. Mr. Santos was among those who testified in the Senate investigation on the scheme allowing convicts of heinous crimes to avail the good conduct time allowance. The committee, which will hold another hearing, has asked the concerned government agencies for a more complete report on their investigations. —Charmaine A. Tadalan

Nation at a Glance — (03/05/20)

March 4, 2020 | 8:00 pm

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Digital bank Tonik to launch in PH following $6-M funding round

March 4, 2020 | 5:14 pm

Tonik, a Singapore-based digital bank targeting Southeast Asia, announced that it has raised US$6 million in an institutional funding round led by venture capital firms Insignia Ventures Partners and Credence Partners.

These funds will be used to launch its digital bank in the Philippines, with commercial operations starting in the third quarter of 2020. Its support and research & development functions will be based out of Singapore and India.

Tonik was founded in 2018 by current CEO Greg Krasnov. Its offerings include deposits, payments, loans, and current accounts.

According to Krasnov, a huge opportunity lies in the country’s huge unbanked market. “Over 70% of the adult population in the Philippines remains unbanked, and market research indicates that over 50% of existing bank clients would be keen to switch their deposits to a pure-play digital contender.”

Tonik will be competing in this market against some digital bank players who have launched previously in the country, such as ING Philippines and CIMB Bank Philippines.

Digital Payments Paving the Way for a Cashless Future

March 4, 2020 | 1:41 pm

The financial technology (FinTech) sector has grown by leaps and bounds in recent years, owing to the Philippines’ vibrant startup community and strong economic fundamentals. Advances in digital technology and the pursuit of rapid digital transformation have spurred the growth of the financial industry, making the country a hotspot for innovation in this exciting field.

The Philippines is well positioned to be a leader in the digital world. In fact, the Tholons Services Globalization Index 2017 ranked the Philippines as third in the Top 50 “Digital Nations”. Key drivers such as a growing digital savvy generation, an expanding middle class, wide coverage of mobile and Internet, and an enterprising startup culture could very well propel the country towards a new era.

Yet, there is much untapped potential in the fintech ecosystem. According to the BSP’s Financial Inclusion Survey 2017, only 23% of Filipino adults have a formal bank account. In addition, only 48% of adults save, but seven in ten savers keep their savings at home. Of the 22% of Filipino adults who avail loans, four in ten do so through informal sources.

A report by The Better Than Cash Alliance in 2019 also found that two out of three Filipinos are financially excluded from traditional financial systems, and thus do not own a digital wallet or digital bank account. This is despite the fact that the volume of e-payments usage in the country has increased to 10% of total transactions in 2018 from barely making up 1% in 2013.

It is clear that even as the fintech ecosystem evolves, challenges such as limited financial literacy and low financial inclusion still remain. There is a need for the Philippines to address these gaps in order to keep pace with their regional peers and accelerate growth in the fintechspace.

Taking steps towards digital transformation

With the Philippines on the cusp of digital transformation, embracing payments technology can drive innovation and tap into its digital potential. Digital payment solutions, for instance, can ease the transition from a cash-and-check dependent financial system into a more efficient and frictionless society.

Companies such as Wirecard have been working with customers and partners to drive their digital transformation strategies. As a global innovation leader in digital financial technology, the German-based company offers both businesses and consumers with a growing ecosystem of innovative digital payments: online, mobile, and at the point of sale. Their digital financial commerce platform provides a full range of end-to-end products that enables global payment acceptance. This allow companies to issue their own payment instruments and provide digital banking, commerce services and convenience to their customers.

Utilizing Wirecard’s technologies can help fast-track financial inclusion in the Philippines, as it empowers both SMEs and consumers with the digital payment capabilities necessary to unlock its digital potential and compete in today’s world.

Over the past decade, digital payments have changed the way businesses operate. Businesses are leveraging digital sales incentives in the form of physical or virtual prepaid cards to motivate their sales team, driving higher performance. For example, Wirecard’s Sales Incentive Card is a cashless solution that increases the effectiveness and engagement of the sales force by providing convenience and security to business owners, enabling them to pay and reward their sales team in real-time and increase productivity.

Additionally, the cards can be used in a wide range of industries. Cardholders can use the contactless cards to carry out seamless transactions at point-of-sale and online, and can manage their cards easily via the Wirecard Payout online portal.

With such innovative, easily accessible, and efficient digital payment solutions, more SMEs and consumers have the opportunity to benefit from digital transformation. This can mark a turning point in the country’s economic development, and contribute to building a better, and more financially inclusive society.

Learn more about Wirecard’s Sales Incentive Card here.

Award-winning communication programs for customers, community and country

March 4, 2020 | 11:34 am

In photo: Meralco and One Meralco Foundation (OMF) teams proudly display trophy haul onstage at the 55th Anvil Awards, led by OMF President Jeffrey O. Tarayao (center) and PIO Head Joe R. Zaldarriaga (seventh from left).

Meralco and One Meralco Foundation (OMF) won nine (9) trophies at the recently-held 55th Anvil Awards. Four (4) Gold Anvils were awarded to campaigns for the effective communication management of last year’s summer supply issue, the power firm’s quarterly operating and financial media briefings, OMF’s school electrification program sustainability initiatives and back-to-school program. The company also bagged five (5) Silver Anvils for OMF’s Relocatees and Informal Settlers Electrification (RAISE) and back-to-school programs, Meralco’s long running communication program, the Meralco Advisory, and the technology and innovation summit MTECH. Meralco’s Public Information Office (PIO) is Anvil Awards’ only recipient of the PR Team of the Year, conferred in 2017. Anvil Awards is organized by the Public Relations Society of the Philippines and is widely recognized as the “Oscars of Philippine PR”.

FDI may decline amid virus fallout

March 4, 2020 | 12:33 am

FOREIGN direct investments (FDI) in the Philippines may dwindle this year as companies around the world suspend their expansion plans amid a coronavirus disease 2019 (COVID-19) outbreak that threatens global growth, according to Philippine central bank Governor Benjamin E. Diokno.

“We expect FDI to continue to slow down due to mounting uncertainties in the global environment,” he said in a speech at a Manila Times forum on Tuesday. He added that these uncertainties continue to dampen investor sentiment here and abroad.

Global FDIs have fallen because companies from around the globe have been putting their expansion plans on hold, Mr. Diokno told reporters on the sidelines of the forum.

FDI net inflow in the 11 months through November last year dropped by 30% to $6.413 billion due to global uncertainties, local regulatory issues and as investors await passage of a measure seeking to lower corporate income tax.

The Corporate Income Tax and Incentives Rationalization Act (CITIRA), which legislators seek to pass before they go on a Holy Week break this March, will gradually cut the corporate income tax to 20% from 30%.

The Bangko Sentral ng Pilipinas (BSP) is targeting $8.8 billion worth of FDI inflows this year, higher than last year’s goal of $6.8 billion.

In his speech, Mr. Diokno said a synchronized global economic slowdown, the return of multilateralism and rising geopolitical tensions between the US and Iran are risks to inflation and economic growth.

The COVID-19 outbreak that has killed more than 3,000 people and sickened about 90,000 more, mostly in China, is also a risk, he said.

The central bank chief also noted that on the domestic front, “the failure to enhance disaster resilience amid increased intensity and frequency of natural hazards and failure to deliver the planned ‘Build, Build, Build’ projects are among the key challenges that are on our radar screen.”

Fitch Solutions Macro Research has downgraded its growth forecast for the Philippines after initially upgrading its outlook in January.

Socioeconomic Planning Secretary Ernesto M. Pernia on Monday said the outbreak could shave up to a percentage point from gross domestic product (GDP) growth if it persists until yearend.

Mr. Pernia said this was based on a scenario where inbound Chinese tourists are totally cut and foreign tourist arrivals are trimmed by 10%, while trade is “drastically reduced.”

Mr. Diokno said BSP would reassess the situation as the outbreak expands to other countries outside China. He added that the central bank’s initial assessment compared the virus with the severe acute respiratory syndrome in 2003, when China was not yet a significant player in the global economy.

Mr. Diokno last month said the outbreak could dent growth in the next two quarters by an average 0.3 percentage point if it persists up to June.

In an e-mailed note on Tuesday, Fitch Solutions said it had revised its economic growth outlook for the Philippines this year to 6% from the 6.3% forecast in January.

“The export sector, specifically tourism, is likely to see intense headwinds from the outbreak, while infrastructure projects could face delays and households receive weaker remittance inflows,” it said.

Its latest forecast is slower than the government’s 6.5-7.5% goal for the year.

The Philippine economy expanded 5.9% last year, missing the government’s 6-6.5% target due to China-US trade tensions, sluggish FDI inflows, the pass-through effects of monetary tightening in 2018 and a delayed 2019 budget, Fitch Solutions said.

It said growth this year would be buoyed by higher government spending paired with a budget boost.

“We expect fiscal stimulus to be a key driver of growth, with government consumption set to contribute a forecast two percentage points to headline growth,” Fitch Solutions said.

Mr. Diokno earlier said he preferred fiscal over monetary stimulus to shield the economy from the effects of the virus outbreak.

The National Economic and Development Authority last month said the tourism sector could lose about P22.7 billion in monthly revenue because of the outbreak.

The Tourism department had estimated P42.9 billion in losses from February to April as flights got canceled and events were postponed. — Luz Wendy T. Noble

How large is the extent of ‘trade misinvoicing’ in the Philippines compared with those in other developing economies?

March 4, 2020 | 12:32 am

THE Philippines was one of the largest sources of illicit trade-related flows in 2008 to 2017 among developing countries transacting with advanced economies, according to a report by Washington-based think tank Global Financial Integrity (GFI). Read the full story.

Report shows ‘deliberate’ trade misinvoicing still a problem for Philippines

March 4, 2020 | 12:32 am

THE Philippines was one of the largest sources of illicit trade-related flows in 2008 to 2017 among developing countries transacting with advanced economies, according to a report by Washington-based think tank Global Financial Integrity (GFI).

According to its report released Tuesday titled “Trade-Related Illicit Financial Flows in 135 Developing Countries: 2008-2017,” the country’s value gap — or discrepancies in reported trade data — with advanced economies in that 10-year period averaged at $10.641 billion yearly, placing it 16th out of 135 developing countries studied. The total value gap reached $106.407 billion during those years.

The country’s 10-year average accounted for over a quarter or 25.44% of the country’s total trade, ranking the Philippines sixth in terms of the value gap’s share to total trade, just behind Bahamas’ 26.6% and a little over Qatar’s 25.36%.

For 2017 alone, the Philippines recorded a $12.01-billion trade value gap, up 30.66% from the $9.194 billion seen the year prior.

The report analyzed the value gap between 135 developing countries and 36 advanced economies by looking at mismatches or discrepancies in reported data of countries due to “deliberate” trade misinvoicing, which then determines illicit financial flows.

Trade misinvoicing is when importers and exporters intentionally falsify stated prices of goods “to illegally transfer value between countries, hide earnings offshore or for tax-evasion and money-laundering purposes,” the report said.

“Overall, the analysis shows trade misinvoicing is a persistent problem across developing countries, resulting in potentially massive revenue losses — at a time when most countries are struggling to mobilize domestic resources to achieve the internationally-agreed UN 2030 Sustainable Development Goals,” it read.

China topped the list with an average value gap of $323.846 billion over the decade, followed by Mexico with $62.9 billion, Russia with $56.8 billion, Poland with $40.9 billion, Malaysia with $36.7 billion, India with $36.1 billion, Thailand with $28.1 billion, Brazil with $26.3 billion, Turkey with $22.1 billion and Indonesia with $22 billion.

By region, developing Asia topped the list with an average value gap of $476.3 billion over the 10-year period, followed by developing Europe ($167.9 billion); Western Hemisphere ($131.5 billion); Middle East/North Africa ($70.6 billion); and Sub-Saharan Africa ($27.2 billion).

Cumulatively, the report found a value gap of $8.8 trillion in reported trade between 135 developing and 36 advanced countries from 2008 to 2017. In 2017, the value gap went down 3.48% to $817.609 billion from $847.105 billion in 2016.

“GFI’s estimates of the orders of magnitude of the value of trade misinvoicing underscore it is a major global challenge that must inform policy responses at the national and international levels,” it said.

To combat illicit trade-related financial flows, the Washington-based think tank said governments must make trade misinvoicing illegal, strengthen law enforcement capacities of customs agencies and its oversight of free trade zones and establish a national trade facilitation committees and multi-agency teams to address fraud, tax-evasion and other related crimes.

It also urged governments to adopt trade misinvoicing risk assessment tools, expand information-sharing between importing and exporting countries and establish public beneficial ownership registries. — BML

AMLA amendments needed to avoid sanctions

March 4, 2020 | 12:31 am

AMENDMENTS to the Anti-Money Laundering Act (AMLA) and the Human Security Act (HSA) should be passed before October to avoid sanctions from the global anti-money laundering watchdog, according to Bangko Sentral ng Pilipinas Governor and Anti-Money Laundering Council (AMLC) Chairman Benjamin E. Diokno.

The Philippines has been under a 12-month observation period since October to implement reforms, particularly to tighten laws against money laundering and counter-terrorism financing. By October this year, the country will be required to submit a comprehensive progress report to the Asia/Pacific Group on Money Laundering (APG).

“Of course there is a window these last few days [for the passage of the amendments]… Medyo tight na ’yung window na yon…But there is another window which is one month — May to June. But we are confident, heavily endorsed naman siya,” Mr. Diokno told reporters on the sidelines of a forum held in Makati on Tuesday.

The 18^th Congress will be on a break from Mar. 14 to May 3.

Finance Secretary Carlos G. Dominguez III said the bills amending the AMLA and HSA will be certified as urgent by President Rodrigo R. Duterte.

“He (Mr. Duterte) confirmed the recommendation to have the BoC (Bureau of Customs) and AMLC vigorously investigate, enhance monitoring, and to certify as urgent pending bills affecting AMLA and the lifting of the Bank Secrecy Law in cases of predicate crime such as money laundering and tax evasion,” Mr. Dominguez told reporters in a Viber message on Tuesday.

Among the amendments to AMLA being pushed are:

• Inclusion of tax crimes; and violations of the Strategic Trade Management Act, relative to proliferation financing of weapons of mass destruction as predicate offenses;

• Inclusion of real estate agents, who engage in buying and selling of real properties;

• Authority of the AMLC to implement targeted financial sanctions;

• Authority of the AMLC to preserve assets subject of freeze orders or asset preservation orders; or authority to retain forfeited assets;

• Expansion of investigative powers of the AMLC, that is, subpoena and contempt powers; and

• Prohibition of injunction against the freeze and forfeiture power of the AMLC.

Meanwhile, House Bill 7141 which seeks to amend the HSA has been pending with the Committee on Public Order and Safety since March 2018. The Senate on Feb. 26 approved on final reading Senate Bill No. 1083, which amends the HSA.

“In relation to the HSA, one of the very important and very urgent MER recommended actions is to amend the legal framework to enable ex parte domestic designations of terrorists, individuals, and organizations; and to implement targeted financial sanctions to stop the flow of funds or assets to terrorists and to stop the use of such funds or assets, pursuant to United Nations Security Council (UNSC) Resolution 1373,” the AMLC said in a statement released on Tuesday.

AMLC said one of the key assessments of the APG’s third mutual evaluation report on the Philippines found that the country had a “relatively strong legal framework with some key gaps in AML/CTF systems and serious risks of financial crime with low levels of effectiveness in combating those risks.”

If the Philippines fails to implement the recommendations set, the country will be identified as a “jurisdiction with strategic deficiencies in its AML/CTF regime that presents a risk to the international financial system.”

“Consequently, our inclusion in the gray list will result to an additional layer of scrutiny from regulators and financial institutions, thereby 1) increasing the cost of doing business; 2) delaying the processing of transactions; and 3) blocking the country’s road to an ‘A’ credit rating,” AMLC said. — L.W.T.Noble