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BY WILSON SY: WHO'S AFRAID OF GHOSTS?
[RELATED: ‘Ghost Month’ festival starts today. August 3]


AUGUST 1 -THE GHOST MONTH: SUPERSTITIONS AND GOOD BUSINESS: President Rodrigo Duterte started his term four weeks ago. Despite being known for his tough guy persona, The Punisher is afraid of living in Malacañang because he heard there are ghosts there. Yet, we cannot blame the president as he is not the only one who is bothered or scared of ghosts. Like him, investors are also wary of ghosts and get spooked by the ghost month, which is a seasonally weak period for stocks. The ghost month The ghost month is the seventh month of the lunar calendar. The dates vary each year, but this year, the ghost month will start on Aug. 3 and end on Aug. 31. The practice of observing the ghost month originated with the Chinese. According to Chinese folklore, the ghost month is a time when spirits of their dead ancestors and relatives visit the world of the living. As such, they refrain from doing things such as travelling, starting a business or moving to a new home as these may upset the spirits. Investments in new ventures and stocks are also put-off for later dates. Ghastly returns In our book “Opportunity of a Lifetime,” we discussed seasonality in the stock market (See Chapter 10 – Investor Education). In page 195 of the book, we showed tables of the performance of the PSE index for each month of the lunar calendar and the Roman calendar. We show these tables again below, but we updated them with the most recent data (1987 to 2015). READ MORE (TABLE)... RELATED, ‘Ghost Month’ festival  starts today August 3...

ALSO: PSEi tumbles on day one of ghost month
[
REGIONAL MARTS FALTER AS INVESTORS CURB STIMULUS BETS]
[RELATED (Aughost 5): Index recovers from 2-day slump]


AUGUST 3 -THE LOCAL stock barometer slid to the 7,800 mark on Wednesday, tracking sluggish regional markets as investors across regional markets tempered UK stimulus hopes while ushering in the so-called “ghost month.”
The main-share Philippine Stock Exchange index lost 149.34 points or 1.86 percent to close at 7,888.44. Apart from the regional downturn, the PSEi was dragged down by further selldown on PLDT and a discounted treasury sale by AEV. AEV fell by 6.08 percent after selling treasury shares at a discount to market while PLDT, the day’s most actively traded stock, fell by 4.94 percent, as investors braced for lower dividends following the sharp decline in second quarter earnings. Investors also sold down shares of First Gen (-4.33 percent) and SM Investments (-3.19 percent). Wednesday (Aug. 3) marked the start of the “ghost month,” a period in the Lunar calendar when Chinese investors avoid making big-ticket investments or other big moves like getting married or moving to a new house. This period also coincides during the season when many investors from the West take long summer breaks, thereby resulting in slower trading volumes. The ghost month will last until Aug. 31. All counters ended in the red. The decline was led by holding firm and services counters which both tumbled by over 2 percent while the mining/oil and property counters both lost over 1 percent. Value turnover for the day amounted to P13.55 billion. There were over four decliners for every single gainer at the market. READ MORE...RELATED, Index recovers from 2-day slump...

ALSO: Securities & Exchange Commission (SEC) mulls criminal case vs Ongpin
[RELATED: Ongpin's daughter steps down from gaming firm]


AUGUST 5 -A day after President Duterte singled out former trade minister Roberto Ongpin in his anti-oligarch campaign, the Securities and Exchange Commission (SEC) is considering filing a criminal case against the businessman. STAR/File photo
A day after President Duterte singled out former trade minister Roberto Ongpin in his anti-oligarch campaign, the Securities and Exchange Commission (SEC) is considering filing a criminal case against the businessman. SEC chairman Teresita Herbosa said the agency would strongly oppose the injunction petition filed by Ongpin with respect to its decision to slap a P174 million fine against the businessman. The SEC order also prevented Ongpin from holding a position in a publicly listed company. “Ongpin’s appeal refers to the administrative aspect of the insider trading case and is separate and distinct from the criminal action which the SEC may file before the Department of Justice. The accused in such action shall upon conviction suffer a fine of not less than P50,000 nor more than P5 million or imprisonment of not less than seven years nor more than 21 years or both at the discretion of the court,” the SEC said. Herbosa said the SEC would see to it that the Office of the Solicitor General, would be provided with all the legal and technical assistance in the interpretation and application of securities laws. Herbosa, who used to be a co-managing partner of Angara Abello Concepcion Regala & Cruz Law Office (ACCRA), believes the SEC has a strong case against him. “We wouldn’t file if it (it’s not a strong case),” Herbosa said. She said that while the SEC abides by the TRO, it believes that its issuance does not satisfy the stringent requisites for the issuance of the extraordinary writ. READ MORE... RELATED, Ongpin's daughter steps down from gaming firm...

ALSO: DOE mulls power bill revisions
[RELATED: COLLUSION SUSPECTED IN LUZON POWER SUPPLY]
[RELATED(2):
DOE to look into possible violations of power utilities]


AUGUST 2 -Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday. Philstar.com/File Photo MANILA, Philippines - The Department of Energy (DOE) is studying the possibility of removing the burden on consumers to pay for system loss charges. Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday. He said the decision to undertake a study came after the DOE received reports some distribution utilities (DUs) have system loss going beyond the cap set by the Energy Regulatory Commission (ERC). “According to (DOE) Secretary Alfonso Cusi, why should the burden of system loss be passed on to consumers when it can be shouldered by utilities, which is a common practice in other countries,” Ilagan said. System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines. Passing on these charges to consumers is allowed under Republic Act 7832, or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994. READ MORE...RELATED, .COLLUSION SUSPECTED IN LUZON POWER SUPPLY...RELATED(2), DOE to look into possible violations of power utilities...

ALSO: Dominguez vows to be ‘nice’ to taxpayers
[RELATED: BIR sets more reforms to speed up tax transactions]


AUGUST 3 -Finance Secretary Carlos Dominguez III said the government would just continue on filing tax evasion cases and pursuing existing ones, prioritizing those it believes are “winnable.”
  Unlike its treatment on drug users, the government has vowed to be nice to taxpayers, dropping the possibility of a name-and-shame campaign and relying on voluntary compliance to raise more revenues. “Those are different things. In our particular case, collecting tax is a little more complex than getting people to surrender for drugs,” Finance Secretary Carlos Dominguez III told reporters yesterday. “It’s going to be aggressive, but I don’t know if it will be as aggressive as that one,” he said. The Duterte administration has come out strong on running after suspected drug offenders even in the face of criticisms it sometimes violates human rights. President Duterte himself had named five police generals allegedly protecting drug syndicates. They all denied any wrongdoing. For erring taxpayers however, Dominguez said the government would just continue on filing tax evasion cases and pursuing existing ones, prioritizing those it believes are “winnable.” There were 635 tax evasion and smuggling cases worth P103 billion left by the previous administration under its Run After Tax Evaders and Run After The Smugglers programs. In addition, the previous government also relied on its Tax Watch project that publicizes company and individual names found to have low tax payments related to their transactions and income. Dominguez, for his part, said he expects more voluntary compliance with planned lower income tax rates. “There has to be a way for government to lower tax rates while broadening the tax base... I am sure there is a way to keep the budget balanced, while growing the middle class,” he said in a speech. READ MORE...RELATED, BIR sets more reforms to speed up tax transactions...

ALSO: By Babe Romualdez - A slap in the face of the PNP
[ALSO by Rey Gamboa: Truly reforming the tax system
]


AUGUST 2 -SPYBITS By Babe G. Romualdez
Business groups are increasingly alarmed over apparent abuses committed by certain members of the Philippine National Police who are under the (mistaken) notion that illegal actions will be condoned. Many observers have told us that a lot of cops are giving off an air of arrogance, as if they have become “the ruling class” in this country. Unfortunately, this kind of arrogance seems to be rubbing off on the kin of PNP officials judging from a slapping incident involving a Cebu Pacific flight attendant and a passenger who reportedly claimed to be the wife of a police general (or colonel). The flight attendant, identified as Madel Ty, posted photos on social media showing her reddish neck and ear due to a stinging slap from the irate passenger who wanted a flight attendant to stow the passenger’s luggage in the overhead bin. Apparently, Ty was only trying to pacify the passenger who was reportedly spewing abusive language, telling the cabin crew that their job is to assist passengers, likening them to “bus conductors.” Not that there is anything wrong with bus conductors, but the female passenger had no business ordering the cabin crew around since it is not their job to carry passengers’ bags. In the first place, a lot of airlines instruct their crew not to carry or lift heavy bags or luggage of passengers because if they sustain any injury as a result, insurance companies will not cover the medical expenses. Ty promised to sue but she took down her Facebook post after it went viral, reportedly apprehensive since she was going against a police general’s wife. The woman should just be glad she was not offloaded from the flight. According to the Civil Aviation Authority Act of 2008 or Republic Act 9497, any person on board the aircraft who assaults, intimidates, or threatens any crew member or flight attendant could be jailed for up to three years and/or fined up to P500,000. READ MORE...ALSO, Truly reforming the tax system BIZLINKS By Rey Gamboa...


READ FULL MEDIA REPORTS HERE:

Who’s afraid of ghosts?


THE GHOST MONTH: SUPERSTITIONS AND GOOD BUSINESS:

MANILA, AUGUST 8, 2016
(PHILSTAR)  PHILEQUITY CORNER By Wilson Sy  Updated August 1, 2016 - President Rodrigo Duterte started his term four weeks ago. Despite being known for his tough guy persona, The Punisher is afraid of living in Malacañang because he heard there are ghosts there.

Yet, we cannot blame the president as he is not the only one who is bothered or scared of ghosts. Like him, investors are also wary of ghosts and get spooked by the ghost month, which is a seasonally weak period for stocks.

The ghost month

The ghost month is the seventh month of the lunar calendar. The dates vary each year, but this year, the ghost month will start on Aug. 3 and end on Aug. 31. The practice of observing the ghost month originated with the Chinese.

According to Chinese folklore, the ghost month is a time when spirits of their dead ancestors and relatives visit the world of the living. As such, they refrain from doing things such as travelling, starting a business or moving to a new home as these may upset the spirits. Investments in new ventures and stocks are also put-off for later dates.

Ghastly returns

In our book “Opportunity of a Lifetime,” we discussed seasonality in the stock market (See Chapter 10 – Investor Education). In page 195 of the book, we showed tables of the performance of the PSE index for each month of the lunar calendar and the Roman calendar. We show these tables again below, but we updated them with the most recent data (1987 to 2015).

READMORE...

As seen in the table above, stock market performance during the ghost month has been historically weak. Based on data from 1987 to 2015, the PSEi was down 16 out of 29 times (or 55 percent of the time) during the ghost month, with an average loss of 2.2 percent.

Moreover, out of all the months in the lunar calendar, the ghost month has the highest chance of declining and the lowest average return.

Returns of PSEi during the different months of the Roman calendar

In the table above, we show the index was down in 20 out of 29 years (69 percent of the time) for the month of August, with an average loss of 3.9 percent. Moreover, the PSEi was down in 14 out of 29 times (48 percent of the time) during the month of September, with an average loss of 1.4 percent. We also note August and September are the only down months in the Roman calendar.

Ghosts scare bulls

Due to the recent strong performance of global markets and the PSEi, many are wary of a possible correction, especially as the ghost month comes. And sometimes, even the staunchest bulls can be spooked by the ghost month. Last week, Tom Lee, one of the most accurate forecasters in Wall Street, made a scary statement.

Lee, a prominent market strategist who worked for JP Morgan, has made accurate calls since the start of this bull market. Like Philequity, he has continued to be bullish and has advocated staying the course on stocks (see Chapter 3 of our book – Staying the Course). Lee stated last week that he thinks August is a scary month for the stock market. He warned the S&P 500 has performed poorly during the month of August since 2009. Below, we show the performance of the S&P 500 for the month of August, from 2010 to 2015.

S&P 500 – Returns for the month of August

Year Return (in %)

Lee, however, qualified his short-term forecast. He said the expects the S&P 500 to fall to 2,100 from its current level of 2,168. This would equate to a three percent correction. However, Lee said this is a dip that investors should buy, as he expects the S&P 500 to reach 2,325 by yearend.

Sell now, then buy the dip?

Investors are probably wondering if they should sell in anticipation of a possible short-term correction. If the market indeed falls two-three percent from current levels, active managers and traders may take advantage of a trading window to generate outperformance. However, we note it is very hard to sell near the top and buy near the bottom.

Moreover, it is extremely difficult to accurately predict the magnitude and duration of such a correction. And even if seasonality in the stock market is backed-up by statistics, it is possible the market may not even experience a near-term correction.

The friendly ghost

In our book, we said investors should take advantage of the seasonally weak performance of the stock market during the ghost month and in the months of August and September by using these periods as buying opportunities. Below is an excerpt from page 196 of the book.

“Rather than being afraid of ghosts, investors should actually take advantage of these months so that when Santa Claus returns, they can sell stocks much higher and take profits. Instead of getting spooked and running away from ghosts during these two months, investors should use these dips as buying windows.”

Seasonality in the stock market should not have a major impact on the investment decisions of long-term investors. Instead, long-term investors may use these dips to gradually increase their equity portfolio. For those who missed the bull party or are still underinvested in stocks, the ghost month might be a good time to start building or adding to equity positions.

Philequity Management is the fund manager of the leading mutual funds in the Philippines. Visit www.philequity.net  to learn more about Philequity’s managed funds or to view previous articles. For inquiries or to send feedback, please call (02) 689-8080 or email ask@philequity.net.

-----------------------------

RELATED FROM THE MANILA BULLETIN

‘Ghost Month’ starts today by Robert R. Requintina August 3, 2016 Share300 Tweet4 Share21 Email13 Share730


HONGKONG GHOST MONTH FESTIVAL -The first sign of ghost month in Hong Kong is the smell of burning paper, usually in tin cans, often alongside incense sticks, candles and offerings of food on the pavement or in common areas of residential buildings. Hell banknotes and paper goods – ranging from cars and mobile phones to clothing and houses – are burned as offerings for ancestors and restless wanderers to use in the afterlife. FROM HUFFINGTON POST ONLINE

Many Asians celebrate the “Ghost Month” Festival starting today, Aug. 3, until the 31st, marking a period believed to be when hungry spirits are allowed to roam the earth.

“Hungry ghosts are those with unfinished business, those who have not gone to heaven, or those who have been forgotten by their families. They must make an effort to make this month a happy month,” said Master Hanz Cua, Feng Shui expert, during an exclusive interview in Mandaluyong City. Cua regularly appears in the daily morning show “Umagang Kay Ganda” on ABS-CBN.

The ancient practice of the ghost festival is observed every year on the 15th day of the 7th lunar month of the traditional Chinese calendar. For 2016, the peak of the festival will be on Aug. 17 and 18. The ghost month this year will end on Aug. 31.

“People in some Asian countries like China, Singapore, and to the Filipino-Chinese in the Philippines, this is the time when they visit departed loves ones in cemeteries. It’s similar to All Souls’ Day here in the Philippines,” said Cua.

Other countries which celebrate the ghost festival are Japan, Vietnam, Malaysia, Hong Kong and Taiwan.

“They light candles or incense as they pray for their loved ones. The families also offer food at the tomb or altar,” he added.


Food and charms for ghosts

In order to prevent the negative effects of the ghost month, Cua said that the people should offer food for the hungry ghosts.

“Offer delicious food like chicken, beef, pork, beer, sweet candies, and soft drinks. Offer entertainment and pray for them,” said Cua.

Charms are believed to ward off the ill-effects of the ghost month, Cua said.

“Pag natuwa or naging happy naman sa’yo ang hungry ghost or satisfied sila sa inalay mo, expect wealth and other good things to come in your life (If the charms or food satisfy the ghosts, good things will come),” Cua added.

Ghost Month taboos

Cua enumerated some activities to be avoided that will help prevent bad luck during the ghost month: Avoid transferring to another house; do not sing, whistle, or spit anywhere; avoid opening a business and signing contracts; avoid swimming or strolling at night; avoid medical surgery; do not get married.

Other things to be avoided: Do not pick coins found on the street, do not hang clothes outside at night, do not go out after 12 midnight, do not open umbrellas at home, avoid selfies, and if your birthday falls on ghost month, do not celebrate at night.

Some of unforgettable events that happened during ghost month are:
/11 Twin Towers attack in the US (Sept. 11, 2001), the death of Lady Diana of Wales (Aug. 31, 1997), death of King of Rock ‘N Roll Elvis Presley (Aug. 16, 1977), tragedies in Payatas, Quezon City (July 10, 2000), and Cherry Hills Subdivision in Antipolo (Aug. 3, 1999), typhoon Ondoy (Sept. 23, 2009), hostage crisis in Luneta (Aug. 23, 2010), 7.7 earthquake in the Philippines (July 16, 1990), and floating Pagoda tragedy in Bocaue, Bulacan (July 2, 1993), etc.


INQUIRER

PSEi tumbles on day one of ghost month
REGIONAL MARTS FALTER AS INVESTORS CURB STIMULUS BETS
By: Doris Dumlao-Abadilla @inquirerdotnet
Philippine Daily Inquirer 04:47 PM August 3rd, 2016

THE LOCAL stock barometer slid to the 7,800 mark on Wednesday, tracking sluggish regional markets as investors across regional markets tempered UK stimulus hopes while ushering in the so-called “ghost month.”

The main-share Philippine Stock Exchange index lost 149.34 points or 1.86 percent to close at 7,888.44. Apart from the regional downturn, the PSEi was dragged down by further selldown on PLDT and a discounted treasury sale by AEV.

AEV fell by 6.08 percent after selling treasury shares at a discount to market while PLDT, the day’s most actively traded stock, fell by 4.94 percent, as investors braced for lower dividends following the sharp decline in second quarter earnings.

Investors also sold down shares of First Gen (-4.33 percent) and SM Investments (-3.19 percent).

Wednesday (Aug. 3) marked the start of the “ghost month,” a period in the Lunar calendar when Chinese investors avoid making big-ticket investments or other big moves like getting married or moving to a new house. This period also coincides during the season when many investors from the West take long summer breaks, thereby resulting in slower trading volumes. The ghost month will last until Aug. 31.

All counters ended in the red. The decline was led by holding firm and services counters which both tumbled by over 2 percent while the mining/oil and property counters both lost over 1 percent.

Value turnover for the day amounted to P13.55 billion. There were over four decliners for every single gainer at the market.

READ MORE...

“Risk assets continued to trade on a weak footing overnight. S&P 500 extended decline and implied volatility index jumped higher. Besides negative spillover from continued sell-off in crude oil, investors seem to be downward adjusting policy easing expectations,” Citigroup said in a research note on Wednesday.

Citigroup said the recently-released details of Japan’s fiscal spending plan were disappointing while risk of disappointment ahead of Bank of England’s monetary policy meeting on Thursday, with markets expecting a mix of rate cut and increase in asset purchases.

“Against this backdrop, downside surprises from US economic data are certainly not helping sentiment either,” the research said.

At the local market, MPI, BDO and JG Summit all slipped by over 2 percent while SM Prime, GTCAP and URC all declined by over 1 percent.

ALI, Metrobank, Megaworld, Globe and AP also slipped.

------------------------------

RELATED FROM PHILSTAR

Index recovers from 2-day slump By Iris Gonzales (The Philippine Star) | Updated August 5, 2016 - 12:00am 2 3 googleplus0 0


The benchmark Philippine Stock Exchange index (PSEi) gained 90.13 points, or 1.14 percent, to finish at 7,978.57, while the broader All Shares index gained 39.68 points, or 0.84 percent, to end at 4,730.81. Philstar.com/File Photo

MANILA, Philippines - The stock market recovered yesterday on a string of good news including a rebound in US stocks.

The benchmark Philippine Stock Exchange index (PSEi) gained 90.13 points, or 1.14 percent, to finish at 7,978.57, while the broader All Shares index gained 39.68 points, or 0.84 percent, to end at 4,730.81.

All other counters closed in positive territory, with the services index leading the gains with an increase of 2.10 percent.

Total value turnover reached P7.14 billion with advancing stocks outnumbering decliners, 130 to 60 while 47 stocks were left unchanged.

Luis Limlingan, managing director at Regina Capital attributed the market’s positive outcome to a rebound in US stocks, a recovery in oil prices and an improvement in the US economy.

“US stocks rebounded to close near session highs and the Dow avoided its first eight day losing streak in five-and-a-half years as a four percent rally in crude prices energized the oil sector. The US labor market remained solid during July even as job creation moderated,” Limlingan said.

Furthermore, he also noted that private payrolls increased 179,000, higher than the market estimate of just 170,000, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody’s Analytics.

“The US service economy remained on a solid expansionary path during July. European equities gained while Asian stocks advanced, rebounding from their worst day since the aftermath of the Brexit vote, as crude oil held onto a recovery,” Limlingan said.


PHILSTAR

SEC mulls criminal case vs Ongpin By Iris Gonzales (The Philippine Star) | Updated August 5, 2016 - 12:00am 1 3 googleplus0 0


A day after President Duterte singled out former trade minister Roberto Ongpin in his anti-oligarch campaign, the Securities and Exchange Commission (SEC) is considering filing a criminal case against the businessman. STAR/File photo

MANILA, Philippines - A day after President Duterte singled out former trade minister Roberto Ongpin in his anti-oligarch campaign, the Securities and Exchange Commission (SEC) is considering filing a criminal case against the businessman.

SEC chairman Teresita Herbosa said the agency would strongly oppose the injunction petition filed by Ongpin with respect to its decision to slap a P174 million fine against the businessman.

The SEC order also prevented Ongpin from holding a position in a publicly listed company.

“Ongpin’s appeal refers to the administrative aspect of the insider trading case and is separate and distinct from the criminal action which the SEC may file before the Department of Justice.

The accused in such action shall upon conviction suffer a fine of not less than P50,000 nor more than P5 million or imprisonment of not less than seven years nor more than 21 years or both at the discretion of the court,” the SEC said.

Herbosa said the SEC would see to it that the Office of the Solicitor General, would be provided with all the legal and technical assistance in the interpretation and application of securities laws.

Herbosa, who used to be a co-managing partner of Angara Abello Concepcion Regala & Cruz Law Office (ACCRA), believes the SEC has a strong case against him.

“We wouldn’t file if it (it’s not a strong case),” Herbosa said.

She said that while the SEC abides by the TRO, it believes that its issuance does not satisfy the stringent requisites for the issuance of the extraordinary writ.

READ MORE...

The general rule is that an appeal shall not stay a judgement under appeal, Herbosa said.

“The CA can only direct otherwise upon such terms as may be just under the circumstances,” she added.

Under the Securities Regula-tion Code, the SEC is mandated to “minimize if not totally eliminate insider trading and other fraudulent or manipulate devices and practices,” Herbosa said.

The case has been set for hearing on Aug. 23 and 24 to determine the propriety of the issuance of a writ of preliminary injunction.

As this developed, Ongpin resigned as chairman and director of listed gaming company PhilWeb and all of its subsidiaries effective yesterday.

PhilWeb shares plunged 36.88 percent to P8.95 Thursday.

According to the SEC, Ongpin benefited from insider information as a director and shareholder of Philex Mining Corp. when he acquired additional shares in the mining firm prior to the sale of the company to the First Pacific group in 2009.

--------------------------------

RELATED FROM PHILSTAR

Ongpin's daughter steps down from gaming firm (philstar.com) | Updated August 5, 2016 - 11:32am 7 439 googleplus1 2


Key subsidiaries of PhilWeb Corp. (WEB) include BigGame Inc., Premyo sa Resibo Inc., e-Magine Gaming Corp., PhilWeb Convergence Corp. and PhilWeb Asia-Pacific Corporation, among others. Google Maps

MANILA, Philippines (UPDATE 2 11:49 a.m.) — The daughter of PhilWeb Corp. chairman Roberto Ongpin stepped down from her post in the online gaming company soon after he resigned.

Anna Bettina Ongpin, a vice chairman and director of the publicly listed firm, resigned following Ongpin's decision to let go of the company's chairmanship.

The younger Ongpin's reason given was "to devote more time and attention to other business matters," according to a disclosure filed at the Philippine Stock Exchange on Friday.

Anna Bettina's resignation was through a brief letter to PhilWeb's board of directors and president Dennis Valdes stating that she is stepping down from the company and all its subsidiaries.

The Ongpin patriarch's resignation on Thursday, meanwhile, came the day after President Rodrigo Duterte said he wanted to destroy "oligarchs" embedded in government.

"The plan really is to destroy the oligarchs that are embedded in government," Duterte said, speaking to representatives of the Parish Pastoral Council for Responsible Voting at Malacañan.

"I'll give you an example, publicly, Ongpin, Roberto. He was influential during the time of (Ferdinand) Marcos, Trade minister, I think. He remained influential despite the succession. During the time of (Fidel) Ramos, he was a hanger on as well as during the time of Gloria (Arroyo) and P-Noy (Benigno Aquino III). Now he owns (an) online (gambling firm)," he added.

Ongpin was trade secretary during former president Ferdinand Marcos' administration.

In his first meeting with Cabinet on June 30, the day he was inaugurated president, Duterte said his government should put a stop to online gaming activities as these are difficult to be taxed.

"'Yung online gambling must stop," Duterte said. "It's out of control... Kung saan saan na lang nag-sprout." — Camille Diola


PHILSTAR

DOE mulls power bill revisions By Danessa Rivera (The Philippine Star) | Updated August 2, 2016 - 12:00am 3 12 googleplus0 0

Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday. Philstar.com/File Photo MANILA, Philippines - The Department of Energy (DOE) is studying the possibility of removing the burden on consumers to pay for system loss charges.

Through its legal team, the agency will study the possibility of removing system loss charges in electricity bills, DOE spokesperson Pete Ilagan said during a forum yesterday.

He said the decision to undertake a study came after the DOE received reports some distribution utilities (DUs) have system loss going beyond the cap set by the Energy Regulatory Commission (ERC).

“According to (DOE) Secretary Alfonso Cusi, why should the burden of system loss be passed on to consumers when it can be shouldered by utilities, which is a common practice in other countries,” Ilagan said.

System loss refers to unbilled power caused by pilferage and physical loss of energy when electricity passes through distribution lines.

Passing on these charges to consumers is allowed under Republic Act 7832, or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994.

READ MORE...

The ERC has set the system loss cap at 9.5 percent for privately-owned DUs and 13 percent for electric cooperatives (EC), which can be passed on to consumers through a line item in their monthly electricity bills.

Ilagan said the review will identify whether the system loss cap is being followed by power distributors.

“The results of the study will form part of the DOE’s position on how this can be recommended to Congress, which allowed the pass-on charges to consumers under the law,” he said.

As for the country’s largest power distributor, Manila Electric Co. (Meralco) has been able to bring down its system loss ang generate savings of over P20 billion for customers, company vice president Ferdinand Geluz said in the same event.

Currently, Meralco’s system loss is 6.46 percent.

“We’ve been very effective [in reducing system loss with the help of] the local government units (LGU) in terms of policing areas prone to pilferage. Another help is of course the consumers’ help in policing, reporting pilferage,” he said.

Meralco spokesman Joe Zaldarriaga said the company will continue to bring down system loss to benefit its customers.

“We’re committed to look for ways and institute measures to further bring this down. At the end of the day, once we are able to address the system loss levels, it benefits the customers,” he said.

Meanwhile, 89 ECs were able to meet the cap set by ERC in 2015, latest data from the National Electrification Administration (NEA) showed.

NEA, the agency tasked for the rural electrification program, monitors 119 ECs nationwide. It said the ECs posted an average record low system loss of 11.12 percent in 2015, lower than the 11.67 percent system loss in 2014.

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RELATED FROM MALAYA BUSINESS INSIGHT

COLLUSION SUSPECTED IN LUZON POWER SUPPLY By Jed Macapagal August 02, 2016

The Department of Energy (DOE) has asked the Energy Regulatory Commission (ERC) to investigate whether power companies are engaging in anti-competitive behavior following the recent string of thinning power reserves in Luzon.

The government suspects power firms are managing power supply-shutting down several plants at the same time or unannounced- to jack up the price of electricity at the wholesale market.

Since last month, the Luzon grid had numerous yellow and red alert calls due to thinning power reserves brought about by unscheduled shut downs largely by coal power plants.

“The DOE is reinforcing efforts to ensure continuous power supply in the country by requesting the ERC to look into the recurring yellow and red alert statuses due to the lack of power supply.

Energy secretary Alfonso Cusi specifically asked ERC to look into whether there is the existence of an anti-competitive behavior from industry player.

ERC is already looking into it,” the agency said in a statement.

The DOE said it is closely monitoring developments in plants that have undergone forced outages which led to loss of power supply which peaked at 2,946 megawatts (MW) over the weekend.

Jose Vicente Salazar, ERC chairman, said the agency will look into the bidding patterns of plants with unscheduled outages.

“We have identified the plants that have gone on unscheduled outages and if this condition is sustained for some time, we will look into the bidding patterns of these plants. We may look further into this if we find reason to believe that the players have taken advantage of the current supply deficit to drive up prices,” Salazar said.

Among the power plants that the DOE said underwent outages are coal plants such as the 647 MW Sual unit; the 2, 300 MW Calaca unit; the 2, 302 MW GN Power unit; 1, 382 MW Pagbilao unit; 2, 245 MW South Luzon Therma Energy Corp.’s unit 1 and 2 together with the 280 MW Malaya thermal plant unit 2 as well as 360 MW from units 3 and 4 of the Kalayaan hydro plant due to low water elevation.

The 180 MW unit 2 of the Kalayaan hydro plant and the 250 MW Sta. Rita natural gas power plant unit 2 earlier submitted planned maintenance shutdown schedules.

Aside from the investigation, the ERC said it supports DOE’s plans to find solutions to further lower power rates.

“We will fully support any DOE initiative aimed at reducing electricity rates and will implement national government policies consistent with our mandate to set the rates and protect the interest of the consumers,” Salazar earlier said.

READ MORE...

He added that the move will assure the electric power industry, especially the electricity consumers, that the ERC is finding ways and means to guarantee that only just and reasonable costs gets into their electricity bill.

ERC is yet to decide whether or not the controversial Manila Electric Co. (Meralco) rate increase of P4.15 per kilowatt hour in the December 2013 billing is anti-competitive.

Among the companies that the ERC investigation unit earlier identified as likely involved in a collusion for the said controversy are Power Sector Assets and Liabilities Management Corp. which operates the Malaya and Casecnan plants; Pan-Asia; Therma Mobile Inc.; Meralco.; 1590 Bauang; CIP II; TransAsia Power Gen; AP Renewables; Udenna Management Resources Corp.; Strategic Power Development Corp.; GNPower Mariveles and SEM-Calaca Power Corp.

The 12 were said to have withhold capacity during the November 2013 supply month that pushed up power prices.

The ERC earlier said if found guilty, these companies companies face fines of between P50,000 and P50 million under the Electric Power Industry Reform Act.

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RELATED(2) FROM PHILSTAR

DOE to look into possible violations of power utilities (philstar.com) | Updated August 5, 2016 - 4:31pm 0 0 googleplus0 0


The National Grid Corporation of the Philippines raised the red alert for Luzon from 9 a.m. to 5 p.m. on Friday. File photo

MANILA, Philippines — The Department of Energy is now looking into possible violations of power utilities due to recurring power interruptions in the past few days.

The National Grid Corporation of the Philippines has been raising yellow and red alert advisories across the country in the past few days.

READ: Luzon grid on yellow alert anew

"These debilitating power interruptions are in total violation of the (Electric Power Industry Reform Act). We have already requested the (Energy Regulatory Commission) to investigate these persistent power brownouts and to take appropriate actions, pursuant to their mandate to regulate industry players," Energy Secretary Alfonso Cusi said in a statement.

The NGCP raised the red alert in Luzon Grid from 9 a.m. to 5 p.m. on Friday while red alert will be raised from 5 p.m. to 6 p.m. and 7 p.m. to 9 p.m.


Follow MERALCO @meralco There will be a TENTATIVE 2-3 hour power interruption due to power supply deficiency affecting: From (cont) http://tl.gd/n_1sovj0k 12:36 AM - 5 Aug 2016 28 28 Retweets 11 11 likes

"Dahil ito sa outage ng mga planta. Maging energy efficient para maiwasan ang posibilidad ng rotational brownout," the NGCP said in an advisory.

Interruptible load program participants are ready to use their generation sets in case of power shortage, the NGCP said. — Patricia Lourdes Viray


PHILSTAR

Dominguez vows to be ‘nice’ to taxpayers By Prinz Magtulis (The Philippine Star) | Updated August 3, 2016 - 12:00am 0 1 googleplus0 0


Finance Secretary Carlos Dominguez III said the government would just continue on filing tax evasion cases and pursuing existing ones, prioritizing those it believes are “winnable.”

MANILA, Philippines – Unlike its treatment on drug users, the government has vowed to be nice to taxpayers, dropping the possibility of a name-and-shame campaign and relying on voluntary compliance to raise more revenues.

“Those are different things. In our particular case, collecting tax is a little more complex than getting people to surrender for drugs,” Finance Secretary Carlos Dominguez III told reporters yesterday.

“It’s going to be aggressive, but I don’t know if it will be as aggressive as that one,” he said.

The Duterte administration has come out strong on running after suspected drug offenders even in the face of criticisms it sometimes violates human rights.

President Duterte himself had named five police generals allegedly protecting drug syndicates. They all denied any wrongdoing.

For erring taxpayers however, Dominguez said the government would just continue on filing tax evasion cases and pursuing existing ones, prioritizing those it believes are “winnable.”

There were 635 tax evasion and smuggling cases worth P103 billion left by the previous administration under its Run After Tax Evaders and Run After The Smugglers programs.

In addition, the previous government also relied on its Tax Watch project that publicizes company and individual names found to have low tax payments related to their transactions and income.

Dominguez, for his part, said he expects more voluntary compliance with planned lower income tax rates.

“There has to be a way for government to lower tax rates while broadening the tax base... I am sure there is a way to keep the budget balanced, while growing the middle class,” he said in a speech.

READ MORE...

At the Philippines Investment Summit yesterday, Department of Finance spokesperson Paola Alvarez reiterated plans to increase excise tax on oil and imposing levies on sweetened drinks to recoup revenue losses.

Sought for comment, Benedict Tugonon, president of industry group Tax Management Association of the Philippines, welcomed Dominguez’ remarks.

“There is confidentiality clause in the tax law that restrains the release of information on cases,” Tugonon said in a phone interview.

“Given the new administration’s thrust in boosting tax compliance, I have no doubt it will encourage the public to pay the correct taxes,” he added.

Alvarez agreed. “Most of the tax leakages are coming from (tax) evasion, smuggling and corruption. We believe we can get that with more compliance,” she said.


PHILSTAR

BIR sets more reforms to speed up tax transactions By Prinz Magtulis (The Philippine Star) | Updated August 2, 2016 - 12:00am 1 2 googleplus0 1

Secondary registration

MANILA, Philippines - Easier business application to print receipts, registration of books and point-of-sale or POS machines could be next in line in the Bureau of Internal Revenue (BIR)’s thrust to ease tax transactions.

“We discussed secondary business registration considering the President’s order to make them easier,” BIR deputy commissioner Nelson Aspe said in a phone interview.

While declining to provide details, Aspe said more reforms to “speed up” tax dealings could be expected in the coming days “since we also want taxpayers to be encouraged to pay.”

Secondary registration pertains to registration of book of accounts, application for authority to print receipts and invoices, use or cash register machine or POS and computerized accounting systems.

Aspe attended the second meeting on streamlining business registration last July 27, which followed earlier orders by BIR commissioner Caesar Dulay to speed up issuances of tax documents.

So far, Dulay has ordered for a one-day processing of tax clearances and five days for certificate authorizing registration. The original for the latter was five to 10 days.

He had also vowed to issue within the day of application international special and general carriers certificates.

Finance Secretary Carlos Dominguez said easing tax payment methods could encourage people to pay more and lead to increase revenues.

READ MORE...

“There must be a way to eliminate the long lines at the BIR offices. Why punish our clients when they have come to pay?,” he said in his speech marking BIR’s 112th anniversary yesterday.

“We can have cleaner, airier and more welcoming offices, for instance...Let the taxpayers breather. You are collecting their money after all,” he added.

These, in turn, are expected to widen the tax base which would offset revenue losses from lower income taxes, without the necessity to raise value-added tax to 14 percent.

“We are still discussing with the House (of Representative) how to proceed (with the tax reform),” Dominguez said.

House Speaker Pantaleon Alvarez has not replied to queries of press time. Tax proposals should emanate from the Lower House by law.

For his part, Senate President Koko Pimentel vowed to support legislative measures that would help BIR “boost its morale” to collect more taxes.

“The new Senate leadership would study the proposal to exempt BIR (employees) from SSL (Salary Standardization Law),” he said in a separate speech.

BIR is the government’s main revenue agency, which accounts for roughly 80 percent of state revenues.

Before the Duterte administration took over, the agency has collected P783.4 billion as of June, up 11 percent year-on-year.


PHILSTAR

A slap in the face of the PNP SPYBITS By Babe G. Romualdez (The Philippine Star) | Updated August 2, 2016 - 12:00am 0 32 googleplus0 1


SPYBITS By Babe G. Romualdez

Business groups are increasingly alarmed over apparent abuses committed by certain members of the Philippine National Police who are under the (mistaken) notion that illegal actions will be condoned. Many observers have told us that a lot of cops are giving off an air of arrogance, as if they have become “the ruling class” in this country.

Unfortunately, this kind of arrogance seems to be rubbing off on the kin of PNP officials judging from a slapping incident involving a Cebu Pacific flight attendant and a passenger who reportedly claimed to be the wife of a police general (or colonel). The flight attendant, identified as Madel Ty, posted photos on social media showing her reddish neck and ear due to a stinging slap from the irate passenger who wanted a flight attendant to stow the passenger’s luggage in the overhead bin.

Apparently, Ty was only trying to pacify the passenger who was reportedly spewing abusive language, telling the cabin crew that their job is to assist passengers, likening them to “bus conductors.” Not that there is anything wrong with bus conductors, but the female passenger had no business ordering the cabin crew around since it is not their job to carry passengers’ bags.

In the first place, a lot of airlines instruct their crew not to carry or lift heavy bags or luggage of passengers because if they sustain any injury as a result, insurance companies will not cover the medical expenses. Ty promised to sue but she took down her Facebook post after it went viral, reportedly apprehensive since she was going against a police general’s wife.

The woman should just be glad she was not offloaded from the flight. According to the Civil Aviation Authority Act of 2008 or Republic Act 9497, any person on board the aircraft who assaults, intimidates, or threatens any crew member or flight attendant could be jailed for up to three years and/or fined up to P500,000.

READ MORE...

The slapping incident may seem minor, but it is an indicator of the kind of arrogance some people have because they (or their husbands) are in positions of power, forgetting that they can be held accountable for their abusive behavior. One other example of arrogance is that of a Negros Occidental town police chief who made his underling stand in a firing range with a balloon between his legs during a shooting practice. In a video that has also since gone viral, clapping and encouraging shouts could be heard after the first shot missed the balloon. The police chief must be such a poor shot because when he fired a second time, he hit the policeman’s foot instead of the balloon.

Even more disturbing is the shooting of 27-year-old motorcycle driver John dela Riarte who was involved in a minor vehicular accident. Witness accounts say the young man, already in handcuffs, was taken in a police patrol car by three responding policemen, one of whom must have been engaged in an argument with Dela Riarte. A few seconds later, the young man was dead – sustaining four shots in the neck, chest and waist.

According to the police version of the incident, Dela Riarte grabbed the firearm of one policeman, saying the man was uncontrollable and theorizing he must have been high on drugs. Relatives decry the incident as “overkill,” disputing the drugs angle since Dela Riarte was reporting for his new job and was on a “natural” high. Besides, how could a handcuffed man overpower three armed policemen?

When the president told the PNP to double efforts against criminality, he did not give them blanket authority to abuse their position. The PNP is supposed to enhance the feeling of safety among Filipinos, not become a source of anxiety and fear.

Cuisia vs. Yasay


COMPOSITE PHOTOS

At the recent Makati Business Club testimonial lunch for US Ambassador Philip Goldberg and outgoing Philippine Ambassador to Washington Joey Cuisia, Cuisia criticized Foreign Secretary Jun Yasay for his inability to have the Permanent Court of Arbitration’s ruling included in the joint final statement following the ASEAN Foreign Ministers’ Meeting in Laos.

While many agree with former Foreign Secretary Albert del Rosario that Secretary Yasay could have made a stronger stand, a DFA spokesman said Secretary Yasay has been constantly in touch with Del Rosario, which is just right. What seems out of place is for current Ambassador to Washington Joey Cuisia to criticize Yasay because as pointed out by columnist Bobi Tiglao, “until he (Cuisia) is relieved, he is a foreign affairs functionary, whose immediate boss now is Yasay. How can an undersecretary – the rank of an ambassador in the Foreign Affairs department – criticize the official actions of the DFA secretary, the chief envoy, and the president’s alter ego?”

We are not surprised though at Joey’s remarks as he reportedly has an axe to grind going back to the days when Jun was SEC chair and Joey was CEO of PhilamLife.

Pacifists are saying the new Foreign secretary should try a new tack since the hardline stance taken in the past has only served to fan the flames of China’s aggression. As they say, different strokes for different folks.

Ongpin hires topnotch lawyer SPYBITS By Babe G. Romualdez (The Philippine Star) | Updated August 4, 2016 - 12:00am 5 103 googleplus0 0


ONGPIN

Businessman Roberto “Bobby” Ongpin scored a win with the temporary restraining order (TRO) issued by the 13th Division of the Court of Appeals (CA), stopping the Securities and Exchange Commission (SEC) from implementing its decision to bar Ongpin from sitting on the board of any publicly listed firm. The SEC accused Ongpin of engaging in insider trading when he sold shares of Philex Mining at negotiated rates in 2009, also slapping him with a P174 million fine.

“In so ruling, we considered not the amount of fine imposed upon Ongpin but the penalty of disqualification and the order for him to relinquish or resign from the positions of director or officer, the extent of which affects not only the company Philex, but all other publicly listed corporations,” the CA said in its ruling.

The businessman decried what he described as harassment from the SEC for resurrecting a case that has already been dismissed twice by the Sandiganbayan. He is certainly not taking this sitting down and has already hired the services of topnotch lawyer Estelito Mendoza and the latter’s legal team to file a countersuit against the government regulator.

The feisty Ongpin said the kind of treatment and persecution he has been receiving from the SEC is totally unfair, promising to pursue the matter till the end. Calling the SEC ruling “anti-business,” the Alphaland chair said the persecution he has been getting is something that he does not wish on anybody – not even on his worst enemy.

Joey Cuisia reacts


Jose L. Cuisia, Jr

Former Philippine ambassador to Washington Joey Cuisia sent us an email in reaction to our August 2 column “Cuisia vs. Yasay” where we wrote about the critical remarks of Cuisia about Foreign Secretary Perfecto “Jun” Yasay because the joint communiqué from the ASEAN Foreign Ministers’ Meeting in Laos did not include the Permanent Court of Arbitration’s favorable ruling regarding the Philippines’ suit against China.

Joey wrote, “…I had completed my assignment as Philippine ambassador to the US on June 30, 2016 because I was co-terminus with President Benigno Aquino III. I don’t know why you relied on the comments of Bobbit Tiglao who hardly ever checks his facts when you said in your column that I should not have criticized Sec. Yasay because he is my immediate boss… Yasay is not my boss and as a private citizen I am entitled to voice my own opinion about the performance or non-performance of a public servant’s job.”

With regard to the rift involving him and Secretary Yasay when the latter was still SEC chair, the former ambassador said, “it was Sec. Yasay who said about a month before the elections that it was Mar Roxas and I who were responsible for the demise of the Pre-Need Industry. It was actually Sec. Yasay who was responsible for the demise of the Pre-Need Industry because of his failure to properly regulate the industry, particularly CAP Plans which invested huge amounts of its planholders’ money in related companies of the Sobrepeña Group which suffered huge losses and consequently affected the ability of CAP Plans to pay for the educational plans of its planholders. Philam Plans honored all of its plans and maintained a very healthy Trust Fund. Again, Yasay pointed the finger at the wrong persons because he was the one responsible for the regulation of the industry.”

Feedback on BGC traffic marshals

Bonifacio Estate Services Corp. (BESC) general manager Rodney Medrano emailed us regarding our July 28 column (“Kotong marshals at the Fort”) about the numerous complaints we received concerning the alleged mulcting activities of BGC traffic marshals.

Medrano assured that they investigate reports regarding apprehensions without any clear violation, and that they impose disciplinary actions against any erring marshal. Vehicle owners and drivers who would like to report a complaint about any of the BGC traffic marshals may send an email message to bgc.com.ph/page/contact-us  or to info@bgc.com.ph  for an investigation to be immediately conducted regarding the complaint.

The BESC general manager also reiterates that the “No Parking” rule is strictly enforced along BGC streets “to ensure smooth traffic flow and make BGC a more pleasant place to walk. Ample parking buildings and surface parking lots have also been made available in the area for the convenience of vehicle owners.”

Medrano also disclosed that while “many BGC residents and visitors have already adapted to this guideline, there are still exceptions which require that our marshals approach and call the attention of the driver of the vehicle, or confiscate their driver’s licenses and issue Unified Ordinance Violation Receipts (UOVRs).”

Apparently, BGC traffic marshals have been deputized and authorized by the Traffic Management Office of the City of Taguig to confiscate licenses and issue UOVRs. “We conduct regular trainings for BGC marshals to ensure that they take on a customer-friendly mindset as they do their jobs,” Medrano said, emphasizing that “there is also no quota system on a required number of apprehensions” and that BESC also collaborates with the Taguig City police on a regular basis regarding traffic and security matters.

“We wish to assure you and the public that we are doing our very best to fulfill our mission and commitment to make BGC a safe, healthy and well-managed community,” Medrano reiterated.

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ALSO FROM PHILSTAR

Truly reforming the tax system BIZLINKS By Rey Gamboa (The Philippine Star) | Updated August 4, 2016 - 12:00am 0 0 googleplus0 0

The clamor for lower income tax rates continues to gain momentum, primarily from the business sector which rightfully justifies its posture with a comparative chart showing the Philippines as having the highest corporate income tax (30 percent) in the ASEAN region, higher than that of Indonesia (25 percent) and Thailand (20 percent).

Comparatively high corporate income taxes are clearly a deterrent to the competitiveness of local businesses, and are a critical factor for foreign investors to decide not to set up their businesses here in the Philippines.

Clearly, if the country wants to continue its growth levels in the next years, the government must align its corporate income tax structure to make it attractive to business and national growth.

High personal income taxes

With regards personal income taxes, the Philippines has also one of the highest rates slapped on its citizens within the ASEAN. At 32 percent, income taxes on working Filipinos are second highest in the region, almost comparable to the 35 percent of Thailand and Vietnam.

While many working Filipinos belonging to lower income brackets earning minimum wage rates are technically exempted from paying income taxes, there in the next salary levels have to endure the high taxes.

While the current personal income tax system is on graduated basis, the lowest rate applicable to those that are not minimum wage earners would still be 20 percent. Thus, a struggling P15,000-a-month employee will effectively bring home only P12,000.

The case gets worse for those in the middle-income brackets, the managers who earn P500,000 a year. After deducting 32 percent tax on their income, they are able to take home only about P30,000.

The current inequitable tax rates on personal incomes of those in the lower and middle classes have not only reduced their capability to improve their standard of living, but have likewise dampened economic growth since personal spending is constrained.

Similarly, the 19-year-old personal income tax structure needs to be reformed to align with new realities, and give more Filipinos some breathing space from the payday-to-payday survival syndrome.

Challenge

Reforming corporate and personal income taxes is estimated to cost the government about P30 billion. And while this may be regarded as a mere fraction of the P3-trillion state budget, this could be significant given the possibility of increased infrastructure spending by the current administration.

During the last six years under the Aquino government, tax collections were effectively raised through new laws (notably from sin taxes) as well as an intensified campaign to run after tax evaders and similar reforms in the bureaucratic tax collection efforts.

But the biggest “stabilizer” was in fact the ultra-conservative demeanor with regards spending, and while the budget deficit was maintained at only roughly two percent of GDP throughout, there were far fewer infrastructure projects that should become the country’s stepping stones for economic growth well into the next decade.

Thus, the move to revise income taxes comes with the biggest challenge: where else could the “lost” P30 billion be earned?

Tax leakages

The previous administration’s recommendation had centered on increasing VAT to 14 percent from the current 12 percent. Recently, the current Finance Secretary Sonny Dominguez had conveyed the government’s reservation to raising VAT.

Instead, he chose to focus on the age-old problem of tax leakages, which includes tax evasion. However, despite all the reforms introduced since the term of former president Fidel Ramos, the two main collecting agencies of government – the Bureau of Internal Revenue and the Bureau of Customs – remain underperformers.

The push to introduce information technology, even closed-circuit television cameras, has been met with opposition, even sabotage attempts. Even the electronic filing of returns remains a challenge, often getting mashed up in system failures especially when nearing deadline dates.

Realistically, there is scope for the BIR and BOC to improve each one’s tax collection efforts through real and meaningful reforms, and perhaps recover more revenues than what will be “lost” from reforming the current income tax structure.

But this has been an aspiration unmet for decades now, and to bank on such becoming a reality in the next few years may be a little risky.

Therefore, as a stop-gap measure, there is a need to line up other revenue generating measures that would not just replace the foregone collections from lowering income tax rates, but hopefully, would even add more to the national coffers.

Choosing the least ‘evil’

Here are a few that’s worth considering:

First, raise taxes on sweetened carbonated and juice drinks. This is basically an anti-sugar consumption act, basically following the principle employed in justifying the increases in tobacco and liquor taxes.

Sugared drinks have basically been linked to the rise in obesity and hypertension problems. Like sin taxes, someone must pay for the public health cost of those affected by sugar ingestion. Likewise, higher taxes could raise selling prices, thus dampening demand.

Reduce VAT; remove much-abused input-output mechanism

Another measure worth considering would be reducing VAT to, say 7.5 percent, but removing the input-output mechanism that has made this tax collection scheme another avenue for corruption and evasion.

Now is perhaps the time too to consider indexing excise taxes on oil and oil products. At current low levels, Filipinos have been benefiting from the successive reductions in pump prices. Thus, an effective increase in petroleum product prices through new taxes may not hurt as much.

Paying taxes must not be a chore

Improving the system for tax payments could further be strengthened, including the simplification of procedures, adoption of a one-stop shop for payment of all personal- and business-related taxes, and definitely a unified identification card so that payments for licenses, SSS/GSIS collections, and similar fees could be done at a single collection point.

Definitely, the ultimate goal should be to streamline the operations at the BIR and BOC so that corruption is essentially eliminated, there is transparency in tax payment transactions and processes, and paying for taxes is painless and not a chore.


Chief News Editor: Sol Jose Vanzi

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