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What happens when you unexpectedly buy that $20 million painting

PETER DOIG’s The Architect’s Home in the Ravine — SOTHEBY’S

JUST 15 months after Peter Doig’s The Architect’s Home in the Ravine fetched $20 million at Sotheby’s, the landscape was back on the market.

Displayed at the Gagosian booth at Art Basel with an asking price of $25 million, it was one of the most expensive works at the world’s top modern and contemporary art fair last month.

The painting, which has been sold so often one dealer calls it a “frequent flier,” last appeared at Sotheby’s in March 2018 in London, where the auction house used an increasingly common financing technique to reduce its risk. In exchange for a fee of about $1 million, client Abdallah Chatila made an irrevocable bid that ensured the work would sell. No one made a higher offer, and he ended up taking it home.

“It sold twice for the world record for the artist and I believed it would set the record for the third time,” Chatila, 44, a Geneva-based investor, said in a phone interview. “I ended up with it.”

Such outcomes have become more common in the past year as auction houses increasingly turn to third-party investors to place prearranged bids in exchange for a share of the profit from the sale. Expensive works that ended up with their backers include Andy Warhol’s Double Elvis [Ferus Type], which went for $53 million at Christie’s in May, and Jean-Michel Basquiat’s Pollo Frito, bought by the guarantor for $25.7 million in November at Sotheby’s.

‘EASY MONEY’
“When the market is going up an up and up, easy money was made on guarantees,” said Thomas Danziger, a partner at Danziger, Danziger & Muro. “Now that the market is not as robust, people end up being the proud owners of the works they didn’t expect to own.”

And like the Doig landscape at Art Basel, which has been offered at auction five times since 2002, an increasing number of works are making the round trip for resale, Danziger said.

A painting of a carpet by Rudolf Stingel, which fetched about $3 million at Christie’s in Hong Kong in 2017, was listed on Sotheby’s website as part of its June 26 contemporary art sale in London. It was estimated at $1.5 million to $2.3 million.

A Christopher Wool painting, spelling the word “FOOL” in big capital letters, which was bought by a guarantor for $14.2 million at Christie’s in 2014, sold in May for $14 million at Sotheby’s.

Lower prices for resales are not uncommon.

‘ONLY BIDDER’
“If these pictures return to the market very soon, people realize that the value is not what the auction prices reflect,” Danziger said. “It’s not a competitive situation. Someone made a bet and ended up being the only bidder.”

For seasoned collectors, guarantees used to be a sure way to get a good deal. They either got the work they wanted at a slightly reduced price, or they received a fee if the painting sold to someone else.

“Guarantees are brilliant if you want to own the work,” said Gabriela Palmieri, who advises collectors, including the Berkowitz Contemporary Foundation in Miami. “Otherwise it’s not worth doing at all. Unless you really know the market of the artist, you are playing with fire.”

Chatila, who also invests in diamonds and real estate, said he’s been guaranteeing art for 10 years. “Last year, the market was slightly softer,” he said. “I ended up buying most of them.”

He said he’s selling The Architect’s Home in the Ravine to buy “another very important painting,” and still thinks he got a good deal on it. “I believe it’s worth much more,” he said. — Bloomberg

Phoenix to amend China Bank trust agreement

PHOENIX Petroleum Philippines, Inc. is asking the consent of the holders of its P1.375-billion fixed rate notes to adopt certain amendments to the trust agreement between the company and China Banking Corp., it told the stock exchange on Tuesday.

“The Proposed Amendment seeks to provide the Company with the flexibility to pursue and capture growth opportunities that will further strengthen its position as the country’s leading independent oil company,” it said.

“With the ongoing expansion of its core operations via roll-out of retail stations nationwide, coupled with the rapid growth prospects of the Company’s subsidiaries, namely PNX Petroleum Singapore Pte Ltd. and Phoenix LPG Philippines, Inc., the Proposed Amendment will allow the Company to strongly support its desired growth trajectory through the aforementioned initiatives,” it added.

Phoenix Petroleum is soliciting the consent of noteholders to amend the trust agreement dated March 16, 2018, between the company and the bank’s trust and asset management group, as trustee and the terms and conditions under which the notes were issued.

Details are set out in the consent solicitation statement that will be made available to the registered noteholders.

The period for the consent solicitation started on July 1 and will end on July 5, 2019. The company said it reserves the right to amend the terms and conditions of the consent solicitation at any time before the expiration date for any reason, including, but not limited to, extending and/or terminating the consent solicitation when the required consents have been obtained.

In March, the listed oil company disclosed that it had signed a memorandum of understanding (MoU) with Philippine National Oil Co. (PNOC), along with China’s CNOOC Gas and Power Group Co. Ltd. (CNOOC G&P), to jointly explore business opportunities in a liquefied natural gas (LNG) hub project.

Phoenix Petroleum had said the MoU was signed on Feb. 28, 2019 in Taguig City at the office of Department of Energy and in the presence of Secretary Alfonso G. Cusi, who also chairs PNOC.

The MoU signing, which came after a series of engagement talks among the three parties, will allow them to explore and discuss business opportunities and cooperation in relation to the equity investment in Tanglawan Philippine LNG, Inc., the project entity for the LNG project.

On Tuesday, shares in Phoenix Petroleum traded lower by 0.49% to close at P12.10 each. — Victor V. Saulon

RCBC Bankard looking to issue five million cards over 10 years

By Karl Angelo N. Vidal, Reporter

THE CREDIT CARD arm of Rizal Commercial Banking Corp. (RCBC) eyes to issue five million cards over the next 10 years, as it sees growth in the non-card debt segment.

Simon Javier A. Calasanz, RCBC Bankard Services Corp. president and chief executive officer, said the firm targets to address the “low” credit card penetration rate in the country — currently at just about four million cardholders — by tapping credit-worthy individuals yet to avail of loans.

“Based on our informal study, about 20 million Filipinos are credit-worthy, and our aim at least over the next 10 years is to issue five million credit cards to those people,” Mr. Calasanz told reporters on the sidelines of RCBC’s annual stockholders’ meeting last week.

He added that the company is looking at the growth in the non-card debt segment or those who still do not have ready access to credit.

“Those are the people we want to issue credit to because these are also the people who currently have no choice to go to the informal lending sector. The informal lending sector charges an arm and a leg in terms of interest rates.”

Mr. Calasanz is optimistic at capturing more clients from this sector even if it is deemed “risky.”

“We entered into that segment fully cognizant of the fact that delinquency might be elevated for that sector. What we did three years ago is we set our risk tolerance threshold. If it exceeds the threshold, it means our test failed, but I’m very happy we are under that risk tolerance threshold even three years into that program,” he said.

In particular, RCBC Bankard put the threshold at 12% of balance delinquency. The delinquency rate for the newly-booked accounts peaked at around seven percent which Mr. Calasanz considers as “healthy.”

“It means the risks we’re taking are fine even for these people without credit history. And because of that, we started expanding to the segment a lot more,” he said in a mix of English and Filipino.

RCBC Bankard’s approach veers from the strategy of the credit card industry for the past years of issuing cards to people who have existing credit.

“The market was not very credit-inclusive before. So now, even if you do not have a credit card or loan, we’ll still give you a card as long as we can assess your capacity to pay.”

As of end-2018, RCBC Bankard had issued 695,000 credit cards.

Last December, Mr. Calasanz said the company eyes to expand its base by an additional 180,000 cards to end 2019 with a card base of 875,000 by expanding its digital platform.

Mylene J. Bico, RCBC Bankard senior vice president, earlier said the credit card firm will continue to partner with other brands to sustain the growth of its card base.

Australia goes for back-to-back rate cuts, keeps option for more

AUSTRALIA executed its first back-to-back interest-rate cuts in seven years and left the door open for additional easing as policy makers attempt to support a slowing economy and try to rekindle dormant inflation.

Reserve Bank of Australia (RBA) Governor Philip Lowe lowered the key rate by a quarter-point to 1% on Tuesday as expected by money markets and most economists. He is due to address community leaders at an open-air dinner tonight in Darwin, where he is likely to flesh out his thinking on monetary policy and the agenda for the remainder of his visit to the north.

“The RBA hasn’t shut the door on more easing, but further rate cuts will be contingent upon a deviation in growth, labor market and inflation outcomes from the current set of forecasts,” said Sally Auld, a senior strategist for interest rates at JPMorgan Chase & Co. in Sydney who expects the cash rate to fall to 0.5% next year. “Still, this is a more dovish statement than we have usually seen after 50 basis points of easing from the RBA in recent years.”

Lowe’s second cut comes as global trade shows more signs of deteriorating, adding to headwinds constraining domestic demand as a slide in property prices discourages household spending. The Aussie dollar gained 0.2% to 69.77 US cents as of 4:08 p.m. Sydney time as futures traders boosted bets the RBA will cut at least once more, though they aren’t confident it will move again until November.

The resumption of trade talks between the US and China and signs that home prices are beginning to stabilize may provide Lowe room to pause as he waits for his monetary stimulus to flow through the economy. Yet the governor left his options open in the event further support is needed.

“The central scenario for the Australian economy remains reasonable, with growth around trend expected,” Lowe said in his post-meeting statement. “The board will continue to monitor developments in the labor market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”

At an international level, manufacturing took another knock at the end of the second quarter, signaling a worsening economic growth outlook that could force the world’s major central banks into action. Investors are pricing in a Federal Reserve rate cut this month and Goldman Sachs Group Inc. says the European Central Bank will lower its deposit rate by 20 basis points and restart asset purchases in September.

“The persistent downside risks to the global economy combined with subdued inflation have led to expectations of easing of monetary policy by the major central banks,” Lowe acknowledged today. He last month warned that the likelihood of major jurisdictions easing monetary policy could limit the stimulus generated as not everyone can have a weaker currency.

PROPERTY PRICES
At home, an easing of lending rules combined with the well-flagged prospect of rate cuts may have begun to encourage buyers back into the housing market, with Sydney property prices rising for the first time in almost two years in June. Along with Prime Minister Scott Morrison’s center-right government’s surprise re-election in May — on a platform of tax cuts — the short-term prospects look brighter.

Structural problems remain: the central bank needs annual growth of more than 2.75% in order to soak up spare capacity and drive down unemployment. Lowe has been urging the re-elected government to intensify infrastructure investment and initiate a new round of economic reform to try to lift the economy’s growth potential.

He has argued that the path to lower rates was cleared somewhat by the RBA estimating the new level at which unemployment lifts inflation is about 4.5%, down from the previous 5%.

Lowe is betting that if the jobless rate grinds lower, workers will eventually be emboldened to ask for larger pay rises and price pressures will then flow through to inflation. Price growth has largely stayed below the bottom of the central bank’s target inflation range of 2-3% for the past few years.

The economy Down Under has slowed in recent quarters and is on track for its weakest fiscal year since 1991.

“Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices,” Lowe said. “Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.” — Bloomberg

Phinma Energy, PPGI name new directors

PHINMA Energy Corp. and its unit Phinma Petroleum and Geothermal, Inc. (PPGI) have named new directors to take over the seats vacated by their previous owners in line with the takeover by Ayala-led AC Energy, Inc. of the listed energy companies.

Gerardo C. Ablaza, Jr., Jose Rene Gregory D. Almendras, and John Philip S. Orbeta were named directors of the Phinma Energy. Maria Corazon G. Dizon, Augusto Cesar D. Bengzon, and Jaime Urquijo Zobel de Ayala were appointed directors of PPGI.

Their appointment took effect on July 1, 2019, which was also the effective date of the resignation of the previous board members, including Ramon R. Del Rosario, Jr., who chaired both Phinma Energy and PPGI.

The corporate move follows the signing on June 25 of the deed of assignment between Philippine Investment Management (PHINMA), Inc. (PHI) and AC Energy on PHI’s rights, title and interests in the management contract with Phinma Energy.

Phinma Energy expressed its consent to the said assignment of management contract.

On Jan. 9, AC Energy announced that it had signed a “mutually strategic agreement” with Phinma Energy that gives the Ayala company a 51.48% stake in the listed firm for P3.42 billion.

Shares in Phinma Energy fell by 4.90% on Tuesday to P2.33 each, while those of PPGI rose by 0.21% to P4.68 each. — Victor V. Saulon

Arts & Culture (07/03/19)

The Strangers

GOETHE-Institut presets The Strangers.

FOUR performers from Japan, Korea, Taiwan and Malaysia, in collaboration with dramaturg Julia Hesse from Germany and director Leandro Kees from Argentina, will perform a creative and contemporary take about empathy and antipathy facing cultural differences through a non-verbal theater and dance performance, entitled The Strangers, on July 8 and 9, 6 p.m., at the Black box Theatre, School of Design and Arts, De La Salle College of Saint Benilde, Malate, Manila. Admission is free on a first-come, first-served basis. This dance production is a German-Asian collaboration initiated by the Goethe-Institut Osaka and the ricca ricca*festa Okinawa and presented by the Goethe-Institut and Japan Foundation in Manila. For more information, visit goethe.de/manila.

Biennale Philippine Pavilion curators talk

CURATORS of past Philippine Pavilions — Edson Cabalfin for the 2018 Venice Architecture Biennale, Leandro Locsin Jr. for the 2016 Venice Architecture Biennale, Joselina “Yeyey” Cruz for the 2017 Venice Art Biennale, and Patrick Flores for the 2015 Venice Art Biennale — will be the featured speakers in a discussion entitled “Global View of Art Practices through Biennales” on July 17 at the Multimedia Room of the De Salle-College of Saint Benilde (DLS-CSB) Museum of Contemporary Art and Design (MCAD). The sharing of experiences will delve deep into the impact of the Philippine participation in these large-scale international events considering the critiques of biennales in general. Meanwhile, the Spectre of Comparison, showcased at the 2017 Philippine Pavilion at the 57th International Art Exhibition of La Biennale di Venezia in Venice, Italy, will be on view at MCAD until July 20.

The MCAD will host a Filipino Sign Language Guided Tour on its on-going exhibit, and back of the house facilities with FSL interpretation, on July 19, 2:30 p.m. For inquiries and tour reservations, call 230-5100 local 3897 or e-mail at mcad@benilde.edu.ph. MCAD is located at DLS-CSB School of Design and Arts Campus, Dominga St., Malate, Manila.

Climate change art exhibit

ALIMANGO by Jimboy Santos

ROBINSONS GALLERIA host an art exhibition that features 11 artists from Malabon. Dubbed as Kulay Kapaligiran by Sining Tambobong, the exhibit is ongoing until July 15 at the Level 3, Veranda at Robinsons Galleria. Participating artists are Ernie Patricio, Lito Fernandez, Erwin Mallari, Eric Mercadol, Sen Lacson, Onio Faraon, Jimboy Santos, Happy Navarro, Val Donadillo, Allen Casacop, and Emerson Casacop. The exhibit showcases the beauty of Malabon with illustrations as to how climate change affects nature. When the climate changes in an area, people, animals and plants have to get used to these changes and alter their lifestyle.

The Big Bad Wolf Book Sale goes to Pampanga

FOR THE first time, the Big Bad Wolf Book Sale will be held in Pampanga from July 12-22. The 24-hour book sale will be held at the LausGroup Event Center in San Fernando. Visitors can expect a wide selection of brand-new English books in various genres with discounts of 50% to 90% off regular prices. Entrance is free. The sale will be bringing in best-seller titles, young adult fiction, romance, science fiction, crime thriller, business, self-help, architecture, design, cooking, children’s fiction, and activity books, among others. The Big Bad Wolf Book Sale will be introducing six new Magic Book or augmented reality (AR) titles which were not available at the Big Bad Wolf Book Sale Manila 2019 in February. With a total of 12 titles, some of the new titles are Cinderella, Old Macdonald, and the Wheels on The Bus. On July 11, lucky visitors can get a chance to participate in an exclusive VIP Day wherein they can get first dibs on the books, a day before the official start of the Sale. To snag tickets to this exclusive sale, visit the Big Bad Wolf Book Sale’s official Facebook page at https://www.facebook.com/bbwbooksphilippines/ and Instagram at @bbwbooksph for contests and special announcements.

National Children’s Book Day with the CCP

THIS year’s National Children’s Book Day (NCBD) recognizes the best work of children’s book writers, illustrators, and publishers. Additionally, the event celebrates the importance of nurturing our young readers’ curiosity and imagination. The event will be held on July 16, 9 a.m. to 5:30 p.m. in the Little Theater Lobby of the Cultural Center of the Philippines (CCP). The celebration is highlighted by the PBBY-Alcala and Salanga Awarding Ceremony at 9 a.m. in the Little Theater Lobby. This event will be recognizing the best creators and publishers in children’s literature. In addition, The Philippine Board on Books for Young People (PBBY) holds the grand opening for its brand new exhibit at the same location. After lunch, the Mulat Sulat 2018 Group will launch five children’s books about LGBT rights at the Little Theater Lobby which will include storytelling and reading of excerpts. Following the launch, Pinoy Kids Read Pinoy Books hosts their Pinoy Kids Celebration. This celebration includes both storytelling and a musical performance, along with various talks. To end the day, 20 kids will go on a tour of the CCP building. The tour will include arts activities, talks, as well as showing off the most important parts of the CCP and its various exhibits. For details contact the CCP Intertextual Division at 551-5959 or 0919-317-5708.

Ballet Philippines in Mindanao, Visayas

BALLET PHILIPPINES goes on an outreach tour of the Visayas and Mindanao.

TO celebrate three milestones, the 50th Anniversary of the Cultural Center of the Philippines (CCP) and Ballet Philippines (BP), and the 40th year of CCP’s Outreach programs, the CCP through its Cultural Exchange Department brings BP on an outreach tour in selected communities in Mindanao and Visayas. The outreach performances will be held on July 3, 4 p.m., at the RDR Gym in Tagum City; July 5-6, 8 p.m., at the Luce Auditorium, Silliman University in Dumaguete City; and July 9, 3 and 7 p.m., at the University of St. La Salle Coliseum in Bacolod City. Among the pieces to be staged are “Valse Fantasie” restaged by Adam Sage after Muñeca Aponte, “Don Quixote Grand Pas de Deux” after Petipa, “Vision of Fire” by Edna Vida, “Moon” by Kun-Yang Lin, “Sama-sama” by Ronelson Yadao, “Pasayawa Ko Day” by John Ababon, “Bungkos Suite” by Alice Reyes, and “After Whom” by Bam Damian III, and excerpts from Tales of the Manuvu also by Alice Reyes. Aside from the performances, BP, led by Associate Director Ronelson Yadao, will also conduct workshops and lecture demos in Tagum, Dumaguete, and Bacolod. A live feed of the matinee shows will also be arranged exclusively for a chosen public school or underserved local community in each site. For more information, contact the CCP Cultural Exchange Department at 832-3674 and 832-1125 locals 1708-1709.

How PSEi member stocks performed — July 2, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, July 2, 2019.

 

Budget submission to wait on House leadership struggle

THE Department of Budget and Management (DBM) said it will wait for the House of Representatives to select a new Speaker before it submits its 2020 budget proposal.

The previous timeline called for its submission a day before the State of the Nation Address on July 22. “But maybe now we’ll have to wait (because) we need to have very close coordination with Congress. So we need to wait for their leadership (to be named)” if the DBM’s efforts are not to “go to waste,” Janel B. Abuel, DBM officer-in-charge, told reporters in Pasay on Monday.

“After the new Speaker is installed… So everything is more or less crystalized. We’re going to work very fast so that as early as we can, we can submit. Iyon lang (the thing is), it’s really important to know (that) we can work with the leadership,” she added.

The Philippine economy grew 5.6% in the first quarter after the delayed passage of the 2019 budget, holding up government spending.

The budget, which was proposed at P3.757 trillion, was reduced to P3.66 trillion after President Rodrigo R. Duterte vetoed a P95.3-billion allocation for the Department of Public Works and Highways (DPWH) after signing it on April 15.

Ms. Abuel said that the DBM is confident in ultimate approval for the budget, but wants to ensure that legislators are duly consulted.

“We’re more positive now. We’re not really fearful but we’re preparing for (a delay) just in case… we don’t want to rush. We want to wait instead of submitting.”

“We want also to at least (have) coordination so that the relationship is better and that the proposed budget will be preserved as much as possible,” Ms. Abuel said.

Asked when she expects the proposed budget to be submitted, Ms. Abuel said, “Within 30 days from SONA, so we have until Aug. 21, but we will not be waiting that long.” — Reicelene Joy N. Ignacio

GSIS head resigns for ‘personal reasons’

GOVERNMENT Service Insurance System (GSIS) President and General Manager (PGM) Jesus Clint O. Aranas said he resigned Tuesday, for “personal reasons” according to his communications staff.

In his resignation letter addressed to President Rodrigo R. Duterte, Mr. Aranas tendered his resignation as the head of the state-run pension fund effective July 2.

“I resign, secure in the knowledge that I have unwaveringly advanced the interest of GSIS and its members in discharging the functions of the said office always in obeisance to all laws and never once compromising my integrity or that of the office I now relinquish,” Mr. Aranas said.

GSIS Vice President for Corporate Communications Margie A. Jorillo confirmed the resignation to BusinessWorld, saying Mr. Aranas stepped down for “personal reasons.”

“As of now, designation of OIC (officer in charge)-PGM, subject to GSIS Board approval,” Ms. Jorillo said in a text message when asked what the GSIS leadership is focusing on.

In a separate message, Executive Secretary Salvador C. Medialdea confirmed that the Office of the President (OP) received the resignation letter.

“Yes, it has but he did not disclose his reason,” Mr. Medialdea said.

Mr. Aranas’s resignation came days after the pension fund was ordered by the Commission on Audit to return about P260.5 million from the pension fund’s Galing ng Pagkilala incentive, finding that this was disbursed without the approval of the OP and the Department of Budget and Management (DBM).

“Foregoing considered, the grant of Pagkilala incentive, without the prior recommendation and approval of the DBM and Office of the President, respectively, resulted in illegal expenditure which is not allowed in audit,” the CoA said in its 2018 annual audit of GSIS.

The GSIS also announced recently that it will go ahead with the sale of a portion of Manila North Harbor, which is operated by the International Container Terminal Services, Inc. (ICTSI). The port operator claims the pension fund has no authority to do so.

The land is estimated to be worth about P33.632 billion, based on the zonal valuation as of May 9.

“As a government entity that exists to ensure the integrity of the funds of its members, GSIS is determined to sell it through public bidding upon the approval of the Board,” Mr. Aranas said in a statement on June 26.

Mr. Aranas was asked to comment but had not replied at deadline time.

Mr. Aranas was appointed to head the GSIS in November 2017. Prior to his appointment, he served as deputy commissioner of the Bureau of Internal Revenue. He also served as national treasurer of Partido Demokratiko Pilipino — Lakas ng Bayan, Mr. Duterte’s political party. — Karl Angelo N. Vidal

PEZA to commission independent study on impact of eco-zone incentives

THE Philippine Economic Zone Authority (PEZA) said it will commission an independent study to establish which of its fiscal incentives the are effective in driving economic growth, to establish the case for retaining the perks when the legislation comes before Congress.

“We will be hiring either SGV or PriceWaterhouseCoopers because we want to have a performance audit of PEZA from the time it was created in 1995 to 2018 so we will really know the efficiency of PEZA and the contribution of every incentive. Kasi baka may mga areas na tama naman see DoF (There may be some parts of the Department of Finance’s critique of the incentive refine are correct). I want to see it myself,” PEZA Director-General Charito B. Plaza said in a briefing last week in Taguig City.

The DoF is proposing tax reforms that rationalize the system of fiscal incentives, including the 5% rate on gross income earned (GIE) and income tax holidays, which the department claims cost the government billions in foregone revenue.

PEZA estimates of the benefits derived from incentives diverge from the DoF’s.

Ms. Plaza added it is the National Economic Development Authority’s (NEDA) duty to conduct a cost-benefit analysis under Republic Act 10708 or the Tax Incentives Management and Transparency Act (TIMTA) of 2015.

“If only NEDA had done the cost-benefit analysis as required by the TIMTA law… Wala daw specialist pa si NEDA (NEDA says it lacks specialists) to interpret and do the cost-benefit analysis. Kaya nga DoF (which is why DoF) bases its position on its own computations and we have our own,” Ms. Plaza added.

Under the TIMTA law, NEDA is required to conduct the analysis annually based on the aggregate tax incentives report compiled annually from data provided by investment promotion agencies.

The independent study PEZA is planning to commission will also include an analysis of social benefits of fiscal incentives, according to Ms. Plaza.

“Growth in the Calabarzon area, for example, where the LGUs (local government units) are earning a lot because they have a share of the 2% GIE and real property taxes while their constituents are given jobs, (exemplifies) the multiplier effect” of such investments, Ms. Plaza said.

She added the Calabarzon region has the “highest social progress that cannot be quantified, that can’t be seen but can be felt.”

Ms. Plaza added she hopes the review will be completed within the year and help PEZA make the argument for retaining incentives when the bills go before the 18th Congress.

The reform bills also aim to reduce corporate income tax to 20% by 2029 from 30% currently while overhauling the current system of fiscal perks. — Janina C. Lim

ILO expecting trillions of dollars in lost productivity as planet warms

International Labour Organization (ILO) logo

THE International Labor Organization (ILO) said heat-related stress resulting from global warming will result in productivity losses equal to more than $2 trillion by 2030 worldwide.

In its “Working on a warmer planet: The impact of heat stress on labour productivity and decent work” report, the labor arm of the United Nations (UN) said that its projections in the next decade the lost productivity is equivalent to the output of 80 million jobs.

“Projections based on a global temperature rise of 1.5°C by the end of this century suggest that in 2030, 2.2% of total working hours worldwide will be lost because of higher temperatures, a loss equivalent to 80 million full-time jobs. This is equivalent to global economic losses of$2,400 billion,” ILO said in a statement on Monday.

In the Philippines, total projected work hours lost due to heat stress are estimated at 2.33% in 2030, the equivalent of 1.217 million full-time jobs.

Heat stress is defined as intolerance to heat, typically for temperatures beyond 35°C. ILO said that this is considered and occupational health and safety hazard that needs to be addressed.

While the report said workers in all industries will be affected by heat stress, some will be more at risk than others.

“Workers in all sectors are affected, but certain occupations are especially at risk because they involve more physical effort and/or take place outdoors. Such jobs are typically found in agriculture, environmental goods and services (natural resource management), construction, refuse collection, emergency repair work, transport, tourism and sports,” the report said. They added even factory workers in indoor settings are at high risk if temperatures in the workplace are not properly regulated.

ILO’s research department head Catherine Saget said that economic losses will not be the only result of global warming, which will also affect labor conditions and contribute to job displacement.

“In addition to the massive economic costs of heat stress, we can expect to see more inequality between low and high income countries and worsening working conditions for the most vulnerable, as well as displacement of people. To adapt to this new reality appropriate measures by governments, employers and workers, focusing on protecting the most vulnerable, are urgently needed, “ Ms. Saget, who is also one of the report’s authors, said.

“Although governments are instrumental in creating a regulatory and institutional environment that facilitates behavioral change at the workplace level, the role of both employers’ and workers’ organizations is no less crucial to a successful implementation of adaptation measures,” the report said. — Gillian M. Cortez

Malacañang approves P25-billion Boracay medium-term plan

PRESIDENT Rodrigo R. Duterte has approved the Boracay Medium-Term Action Plan, which covers measures for the resort island like enforcement of environmental rules and waste management.

“We… announce the approval of the Boracay Medium-Term Action Plan, which will sustain the efforts of the government after its closure,” the President’s Spokesperson Salvador S. Panelo said in a statement Tuesday following the Cabinet meeting.

Mr. Panelo said National Economic and Development Authority (NEDA) Director-General and Socioeconomic Planning Secretary Ernesto M. Pernia and Undersecretary Adoracion M. Navarro reported during the Cabinet meeting Monday that the action plan has four themes: “1) Enforcement of laws where there will be interventions on the regulation of visitors and hotel accommodations; 2) Prevention (covering) interventions in sewerage infrastructure, solid and liquid waste management; 3) Rehabilitation and recovery of ecosystems; and 4) Sustainability of activities in the island such as improvement of roads and public health infrastructure, construction of permanent housing program for indigenous people and education facilities.”

NEDA has said that the action plan will be implemented until 2022.

In January, NEDA said an estimated investment of P25.27 billion is required to implement the action plan.

The private sector, according to NEDA, will finance P15.89 billion or 62.9% of the total cost.

The action plan, NEDA said, will meet the goal of ensuring that the island remains “a world-class tourism destination with a vibrant, productive and climate-resilient economy that is geared toward inclusive growth and anchored on the sustainable development of its innate natural resources.”

Mr. Duterte ordered the six-month closure of Boracay on April 26, 2018 upon the recommendation of the Department of Environment and Natural Resources (DENR), the Department of the Interior and Local Government (DILG), and the Department of Tourism (DoT). — Arjay L. Balinbin

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