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Food industry seeking to expand Mideast footprint via Gulf fair

THE Philippines is seeking to expand the reach of its products in the Middle East, the Trade department said on Friday.

In a statement, the Department of Trade and Industry (DTI) said the Philippine Trade and Investment Center-Middle East and Africa is currently mounting an outbound business matching mission (OBMM) in the Middle East between Feb. 12 and 24.

“The OBMM is in conjunction with Gulfood 2020 in Dubai World Trade Centre,” the DTI said. “Gulfood is the world’s largest annual food, beverage, and hospitality exhibition which attracts F&B professionals from all over the world to Dubai.”

The mission aims to help the food sector diversify its markets.

“The featured products for this mission are food items, sauces, spices, mixes, and condiments as well as cargo and logistics,” the Trade department said.

Philippine companies participating in the mission are Fitrite, Inc; Fruits of Life, Inc; HDR Foods Corp; Jocker’s Food Industries; Magic Melt Food, Inc; Marigold Manufacturing Corp; Marikina Food Corp; Pinesvill Trading FZE LTE; Pixcel Transglobal; Sagrex Food, and LBC.

DTI-Trade Promotions Group (TPG) Undersecretary Abdulgani M. Macatoman said: “We hope that through this OBMM, the Philippines will be able to explore the business environment and possible prospects in the Middle East markets and sustain networking and follow-up activities in the UAE as part of the mission legs last 2019.”

DTI-Export Marketing Bureau Director Senen M. Perlada said Philippine exporters will be meeting with prospective partners or buyers in the Middle East.

The engagement, Mr. Perlada said, will give Philippine exporters knowledge of the market requirements “in terms of volume, quality, and price.”

The DTI estimates that the Philippines exported a total of $720.1 million worth of goods to the Middle East in the 11 months to to November.

Goods imported from the Middle East during the period amounted to$3.3 billion.

“Among the top products exported by the country were bananas, including plantains, fresh or dried ($211.9 million), input or output units, whether or not containing storage units in the same housing ($64 million), other bread, pastry, cakes, biscuits and other baker’s wares, whether or not containing cocoa ($41.3 million), pineapples, fresh or dried ($38.1million), and video projectors ($22.1 million),” the department said.

The Philippines’ top imported products from the Middle East were “petroleum oils and oils obtained from bituminous minerals, crude ($2.1 billion), light petroleum oils and preparations thereof ($225.9 million), propane, liquified ($126.6 million), butanes, liquified ($120.9 million), and aeroplanes and other aircraft, of an unladen weight not exceeding 2,000 kg ($72.7 million).” — Arjay L. Balinbin

BIR adds PayMaya to online payment platforms

THE Bureau of Internal Revenue (BIR) said Friday it expects to grow the volume of taxes paid online after launching a seventh electronic channel through e-wallet service PayMaya.

BIR Deputy Commissioner for Information Sysyems Group Lanee C. David said electronic filers (e-filers) have increased over the years after the opening of various digital platforms.

Last year, Ms. David said the number of e-filers nearly tripled from 2015 levels to 1.796 million, including 60% of the bureau’s business taxpayers.

“Now with the addition of PayMaya, we are expecting a significant shift in favor of electronic payments and of course, a significant increase in our e-filers,” she said.

She said PayMaya could expand the taxpaying demographic particularly for its client base of individuals and the unbanked, since the platform does not require users to have bank account.

The other six electronic payment systems in use for tax payments are electronic filing and payment system (eFPS), Globe GCash, Development Bank of the Philippines’ PayTax Online, the e-Tax Payment System (eTPS) of the Land Bank of the Philippines and Union Bank’s Online Tax Payment facility.

“We are happy to offer PayMaya as a new payment channel where individual Filipino taxpayers can easily remit their taxes no matter where they are in the country,” BIR Commissioner Caesar R. Dulay said.

On the sidelines of the launch yesterday, Ms. David said around 84% of all taxes collected by the bureau in 2019 were received through online portals, most of which were from large taxpayers such as businesses, with the remaining 16% collections were received over the counter.

The Finance department reported Thursday that tax payments done online nearly doubled last year, with the total amount of tax payments processed online surging 92% to P1.2 billion in 2019.

The number of electronic tax payments also increased to 446,753 total transactions, up 60%, it said.

DoF Undersecretary and Head of the Revenue Operations Group (ROG) Antonette C. Tionko said the department aims to convert over 15 million transactions currently paying over the counter to digital payment services, equivalent to 80% of the total number of transactions the BIR processes annually.

The PESONet platform could save the bureau as much as P230 million annualy in transaction fees if taxes are paid online, as this will lower fees charged by authorized banks to P25 from P40 for over-the-counter dealings. — Beatrice M. Laforga

BSP advises institutions to stop withholding tax on some payments to central bank

FINANCIAL institutions have been advised to stop withholding taxes on their payments to the Bangko Sentral ng Pilipinas (BSP) following the implementation of a BSP tax exemption under the New Central Bank Act.

In a circular, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said the advisory follows Revenue Regulations No. 2-2020 issued by the Bureau of Internal Revenue, which lays out the BSP’s exemption from paying national internal revenue taxes on income from its governmental functions.

“In this respect, all BSFIs (BSP-supervised financial institutions) and OPSs (operators of payments) can now discontinue the withholding of taxes on their payments to the BSP in relation to the above-mentioned transactions or activities,” Ms. Fonacier said.

Finance Secretary Carlos G. Dominguez, III said that the revenue regulations will cover BSP income including those activities that are related to the central bank’s primary objectives to supervise over bank operations.

It will also include those related to the BSP’s regulatory and examination powers over quasi-banks, money service businesses, credit-granting businesses and payment system operators.

Activities related to the central bank’s mandate to maintain price stability, monetary and financial stability, and the convertibility of peso will also be included in the tax exemption.

“All other incomes not included in the above enumeration shall be considered proprietary income and shall be subject to all applicable national internal revenue taxes,” Ms. Fonacier said.

The New Central Bank Act provides for a BSP exemption from all national, municipal and city taxes, fees, charges, and assessments, for five years after the law’s approval.

According to the law, the tax exemption will also be applicable to BSP’s properties, resources, receipts, expenditures, profits, and income.

Likewise, contracts, deeds, documents and transactions that are related to the BSP’s conduct of business will also be included in the tax exemptions.

“Bangko Sentral itself would otherwise be liable, and shall not apply to taxes, fees, charges, or assessments payable by persons or other entities doing business with the Bangko Sentral,” according to the law.

The law was passed in February 2019.

Peso firms week-on-week after Fitch raises outlook

THE peso weakened to P50.56 to the dollar on Friday, though it rode positive sentiment to strengthen week-on-week after a sovereign credit outlook upgrade by Fitch Ratings to “positive” from “stable.”

The peso fell from its Thursday close of P50.50 but rose from P50.755 a week earlier.

It opened yesterday at P50.47 against the dollar, with a low of P50.58 and a high of P50.42.

Dollar volumes fell to $831.5 million from $1.106 billion Thursday.

A trader said the Friday weakness was due to “stronger-than-expected US inflation reports overnight.”

Reuters reported that growth in the US consumer price index (CPI) accelerated to 0.2% in January from 0.1% in December.

Asked about the week-on-week gains, another trader said the peso rose “driven by the Fitch’ announcement of an outlook (upgrade from) positive to stable… along with the narrowing trade deficit,”

Fitch announced the upgrade Tuesday, saying it expects the Philippines’ sound macroeconomic policy framework to continue, bolstering growth and keeping inflation stable.

Fitch kept the credit rating at “BBB.”

The Philippine Statistics Authority reported that the trade deficit narrowed to $37.05 billion last year compared to the $43.53-billion deficit in 2018.

BSP eyes another rate cut in Q2 amid outbreak

THE Philippine central bank may cut the key rate by another 25 basis points (bps) as early as the second quarter to shield the economy from the effects of a deadly coronavirus outbreak, according to its chief.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno told reporters on Friday the outbreak that has killed more than a thousand and sickened tens of thousands more in China was an economic risk.

The policy-making Monetary Board might enforce the rate cut next quarter if the health menace takes a bigger toll on the country’s growth than what economic managers had expected, he said.

“Our target is maybe second quarter or second half of the year,” Mr. Diokno said.

“At the moment, I don’t see the need for monetary easing other than what we have done,” he said. “We are happy where we are right now.”

BSP cut benchmark interest rates on Feb. 6 to take advantage of slower price increases and shield the economy from the effects of a deadly coronavirus outbreak.

The Monetary Board cut the key rate by 25 bps to 3.75% at its first policy meeting of the year, in line with market expectations.

Mr. Diokno at that time said the spread of the virus could affect economic activity and market sentiment in the coming months.

The manageable inflation environment “allowed room for a preemptive reduction in the policy rate to support market confidence,” he said.

The decision followed 75 bps of rate cuts last year and 175 bps of rate increases in 2018 amid a high inflation environment.

January inflation picked up more than expected to an eight-month peak of 2.9%, but it was still within the central bank’s comfort range.

The rate was faster than 2.5% in December but slower than 4.4% in January 2019, according to data from the Philippine Statistics Authority.

It was still within the central bank’s 2-4% target for the year.

Mr. Diokno said BSP would opt to use traditional monetary policy tools if the need arises.

“We can tap the traditional rate cuts or reserve requirements,” he said. “We don’t need to resort to other measures.”

The Monetary Board’s next policy meeting is on Mar. 19. It will also hold policy meetings on May 21 and June 25. — Luz Wendy T. Noble

Senate to meet with Executive on legislative agenda

PALACE and Finance officials will separately meet with Senate leaders next week to discuss President Rodrigo R. Duterte’s legislative agenda, Finance Secretary Carlos G. Dominguez III said on Friday.

This comes after Senate President Vicente C. Sotto III said the chamber won’t be able to pass a bill that seeks to lower corporate income tax and rationalize tax incentives by March.

Senate leaders will meet with Palace officials on Monday, to be followed by a meeting with Finance officials two days later, Mr. Dominguez told reporters in a Viber message.

He said he remained hopeful that the Senate would approve the measure before Congress takes a seven-week Holy Week break.

Mr. Sotto earlier cited the intricacies in the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) and Passive Income and Financial Intermediary Taxation Act (PIFITA).

Mr. Dominguez last week said the bill seeking to lower corporate income tax would rationalize the government’s “tangled” tax incentive scheme, which has forced it to forego hundreds of billions of pesos in revenue.

Also referred to as the second package of the Comprehensive Tax Reform Program (CTRP), it is one of Mr. Duterte’s priority measures.

Aside from the P441 billion pesos the government “gave away as tax discounts,” some companies that avail themselves of fiscal perks cheat the state by abusing transfer pricing rules or by shifting profits and costs to cut tax liabilities. The latter costs the government about P504 billion in a year, he said.

Senators are still discussing the bill. The House of Representatives approved a counterpart measure in September last year.

The Finance department wants the remaining tax measures under the tax reform program to be approved before the campaign season for the 2022 presidential and general elections kicks in.

All of the remaining bills under the tax reform program are still at the committee level, Mr. Sotto said in a mobile-phone message, adding that he could not guarantee their approval on time.

The passive income bill, which will simplify the tax structure by halving the 80 combinations of tax base and rates on passive income and financial transactions, is pending at the Senate committee level.

“The complicated tax structure makes tax administration and compliance difficult and costly for both government and the private sector,” Mr. Dominguez said in his speech last week.

Other pending tax reform bills include one that seeks to simplify real property valuation and assessment and another that will raise the government’s share in mining revenue.

Mr. Dominguez said the remaining tax packages will “help produce a more business-friendly environment.”

“While we await the passage into law of these remaining tax reform packages, we continue to implement measures that will reinvigorate our capital markets, boost investor confidence and enhance financial inclusion,” he said. — Beatrice M. Laforga

Court orders arrest of ex-Senator Trillanes

A QUEZON City court has ordered the arrest of a former senator critical of President Rodrigo R. Duterte after he was indicted for inciting to sedition last month.

Former Senator Antonio F. Trillanes IV and 10 co-accused may post a P10,000 bail, according to the Metropolitan trial court.

The Justice department last month indicted Mr. Trillanes along with 10 other people including for allegedly circulating a series of videos accusing President Rodrigo R. Duterte and his family of being in the illegal drug trade.

It dismissed the sedition, inciting to sedition, cyberlibel, libel, estafa and obstruction of justice complaint against all 31 respondents, including Mr. Trillanes, Vice President Maria Leonor G. Robredo, detained Senator Leila M. De Lima, former Senator Paolo Benigno A. Aquino IV, and other opposition candidates during the midterm elections.

Human Rights Watch earlier said authorities should drop the “preposterous complaint” against opposition politicians, religious leaders and human rights advocates.

It said the case was a “transparent attempt to harass and silence critics” of Mr. Duterte’s bloody drug war. — Vann Marlo M. Villegas

Taal alert level lowered further

REUTERS

STATE volcanologists lowered Taal Volcano’s alert status to level 2 on Friday, citing “diminished plume activity.”

The lower status does not mean “unrest has ceased or that the threat of an eruption has disappeared,” the The Philippine Institute of Volcanology and Seismology said on its website.

Residents in high-risk areas must be prepared for a quick and organized evacuation in case the volcano acts up again, the agency said.

Taal’s alert status reached the second-highest level at No. 4 last month as state volcanologists warned of an impending hazardous eruption.

It was lowered to level 3 on Jan. 26

More than 151,000 families in Batangas, Quezon, Laguna, and Cavite provinces were affected by Taal Volcano’s eruption starting on Jan. 12, the local disaster agency said in a 6 a.m. report on Friday.

About 3,000 families were taking temporary shelter in 76 evacuation centers, while 53,826 were staying outside, it said.

The volcano emitted a giant ash plume that covered many cities near the capital, forcing financial markets to suspend trading and the Manila airport to close. — Genshen L. Espedido

Former chief justice named GSIS chairman

PRESIDENT Rodrigo R. Duterte appointed retired Chief Justice Lucas P. Bersamin as chairman of the Government Service Insurance System (GSIS).

Mr. Duterte approved Mr. Bersamin’s nomination by the state pension fund’s board. The former magistrate will replace Rolando L. Macasaet.

Mr. Bersamin will also replace former GSIS President and General Manager Jesus Clint O. Aranas as a member of the Board of Trustees. Mr. Aranas resigned in July.

The former chief justice will serve the unexpired term of Mr. Aranas until June 30.

“We are confident that Mr. Bersamin would serve the GSIS with the same dedication and integrity he demonstrated in his many years of government service,” presidential spokesman Salvador S. Panelo said in a statement. — Vann Marlo M. Villegas

MacroAsia and Chinese partner bag Sangley airport project

THE provincial government of Cavite has awarded the P208.5-billion contract to develop Sangley airport to the listed holding firm of businessman Lucio C. Tan and its Chinese partner.

In a disclosure to the stock exchange on Friday, Mr. Tan’s MacroAsia Corp. said it had received on Feb. 14 the notice of selection and award for the Sangley Point International Airport project.

MacroAsia has teamed up with China Communications Construction Co. Ltd. for the contract covering the development and implementation of the first phase of the airport.

It said the Public-Private Partnership Center’s selection committee acted favorably on Feb. 11, 2020 upon the recommendation of the Cavite provincial government, which chose the Tan-led consortium as its joint venture partner for the project’s first phase.

It said the initial phase will have a project cost of approximately P208.5 billion.

MacroAsia said it would take 12 to 18 months, from the signing of the joint venture development agreement, for the tandem to finish the detailed engineering design.

Before it was repurposed for general aviation, Sangley was formerly known as Danilo Atienza Air Base. Its location on Sangley Point, a narrow peninsula which served as a naval facility during the Spanish occupation, is surrounded by navigable waters that require extensive reclamation.

Cavite’s government and its joint venture partner plan to develop a bigger airport out of the existing small airport.

The proposed airport will have four runways — or double the two runways of the Ninoy Aquino International Airport — and a terminal that can handle 100 million passengers annually.

Last month, Cavite Governor Juanito Victor C. Remulla said the local government was looking at Feb. 15 to start the project and that it was scheduled to make an announcement.

He said the airport would be operational by 2023, and the fourth runway to be opened after six years.

On Friday, shares in MacroAsia jumped P1.15 or 11.56% to close at P11.10 each. — Arjay L. Balinbin

Ayala Land income up 13% in 2019

AYALA LAND, Inc. (ALI) reported a 13% increase in net income last year to P33.2 billion after a single-digit growth in revenues that was driven by sales of office, commercial and industrial lots, the listed property company said on Friday.

The double-digit profit growth comes even as revenues grew by just 2% to P168.8 billion. The company has yet to report figures for the fourth quarter alone.

In its disclosure to the stock exchange, ALI said sales were supported by higher contributions from new leasing formats. It said property development revenues reached P117.6 billion, without giving a comparative number.

“We continue to serve new areas in the country and reach out to a broader market with more affordable products. This is in line with our mission to enrich the lives of more Filipinos. Furthermore, we continue to invest in all our existing estates which help spur economic activity in their respective localities,” said Bernard Vincent O. Dy, ALI president and chief executive officer, in a statement.

Sales reservations during the year hit P145.9 billion, up 3% compared with the figure a year ago as ALI’s Alveo and Avida brands recorded reservation growth.

Commercial leasing revenues rose 13% to P39.3 billion, driven by newly opened malls, offices and hotels.

Shopping center revenues rose by 11% to P22 billion after the increased contributions from Ayala Malls Feliz, Capitol Central and Circuit Makati.

In 2019, ALI opened three shopping centers with a total gross leasable area of 213,000 square meters, bringing its mall footprint to 2.12 million square meters.

Office revenues grew by 12% to P9.7 billion with the improved performance of ALI’s office assets in Ayala North Exchange, Vertis North, and Circuit Makati. Office gross leasable area hit 1.17 million square meters after the completion of Ayala North Exchange BPO Tower, Manila Bay BPO Tower and Central Bloc Corporate Center 1 in Cebu.

Revenues from hotels and resorts increased by 19% to P7.6 billion, with Seda Ayala Center Cebu and Seda Lio recording strong patronage. Up to 797 rooms were opened to this year to bring ALI’s total hotel and resort rooms to 3,705.

ALI’s performance last year was marked by the second straight year that it exceeded its target P100-billion capital expenditure (capex) with the continued investment in new mixed-use developments across the country. Capex last year hit P109 billion equivalent to 64% of gross revenues.

Last year, ALI launched P158.9 billion worth of property development projects and P15.1 billion in malls, offices, and hotels resorts with its continued thrust to build sustainable, integrated, mixed-use communities across the country.

“The company also continues to extend its reach to serve the broader housing market. Its Avida, Amaia and Bellavita residential brands delivered 11,476 units in 2019 and have, over the last five years, increased its delivered units by 28% year on year,” it said.

The company’s major launches last year include Cresendo in Tarlac, which is its 29th estate to date.

ALI invested P18 billion to develop the 290-hectare “new downtown” in Tarlac, which is three kilometers from the Subic-Clark-Tarlac Expressway and MacArthur Highway. It said a 32-hectare industrial park for light to medium industries, and a commercial row of shophouses are poised to jumpstart local business and employment in the area.

The company also launched the 120-hectare Broadfield, which was planned as a new commercial and industrial district in Biñan, Laguna.

“Seeing potential in enhancing fully built-up areas with smaller community hubs, ALI also introduced The Junction Place, an 11-hectare pocket urban development located in the Novaliches-Quezon City area,” it said.

This year, ALI through its real estate investment trust (REIT) vehicle AREIT, Inc. became the first Philippine company to file for listing at the Securities and Exchange Commission.

The filing on Feb. 7, 2020 “reflects the company’s commitment to provide Filipinos with options to invest in high-quality, income-generating assets,” it said.

“ALI’s initiative to establish the first REIT reflects its confidence in the local economy, and with it hopes to pave the way for the development of a healthy and sustainable REIT market in the country,” it added.

On Friday, shares in ALI traded lower by P1.80 or 4.2% to close at P41.10 each. — Victor V. Saulon

Vivant ventures into sewerage project in Palawan

A UNIT of Vivant Corp. has acquired a 45% stake in a company that is jointly developing with a local government a combined sewerage and septage facility for Puerto Princesa City in Palawan province.

In a disclosure to the stock exchange on Friday, Vivant said it was notified by wholly owned subsidiary Vivant Infracore Holdings, Inc. of the acquisition by Vivant Hydrocore Holdings Inc. of the equity interest in Faith Lived Out Visions 2 Ventures Holdings, Inc., or FLOWs.

“The transaction will result in Vivant ultimately owning 40% in Puerto Princesa Water Reclamation and Learning Center, Inc., the joint venture company of the City of Puerto Princesa and FLOWs,” it said.

Vivant also said that the value of the transaction is less than a percent of its stockholders’ equity.

The disclosure comes after the listed company earlier this week disclosed the signing of a 15-megawatt (MW) power supply agreement between the Bantayan Electric Cooperative, Inc. (Banelco) and Isla Norte Energy Corp.

Isla Norte is a consortium of Vivant Energy Corp., its wholly owned subsidiary Vivant Integrated Diesel Corp. and Gigawatt Power, Inc., with the Vivant group owning 65% total equity.

Under the agreement, Isla Norte will install a 23.31-MW diesel-fired power plant in the town of Bantayan, a popular tourist destination in northern Cebu.

Vivant Integrated Diesel is a wholly owned subsidiary of Vivant Energy, which manages the investments of publicly listed Vivant Corp. in the energy sector. — Victor V. Saulon

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