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2017 BUDGET SWINGS TO SOCIAL SERVICES
[RELATED: Economy grows, but many don’t feel gains]


AUGUST 16 -The 2017 government budget presented by the Duterte administration to Congress yesterday is 12 percent higher than this year, sets more social services,is static on economic services and about three percent of the expected gross domestic product (GDP).
The government plans to spend more than what it will earn next year compared with this year’s deficit cap of 2.7 percent, but more prudent than what was earlier announced. The budget was also submitted late than usual. The General Appropriations Act is usually submitted right after the president says the State of the Nation Address which was done July 25. The constitution, however, gives the President, 30 days after SONA to submit the budget. President Duterte in his budget message said his priority is to implement programs that would benefit the poorest and that Congress must scrutinize the budget with the interests of the marginalized in mind. The Department of Budget and Management (DBM) pegged next year’s budget at P3.35 trillion. The 2017 budget is 11.6 percent higher than the P3.002 trillion allocated this year. The Duterte administration’s first proposed budget is called “A Budget for Real Change,” as it focuses resources on programs and projects that aim to achieve the government’s 10-point socioeconomic development agenda. Of the proposed budget for 2017, DBM said 40 percent will be for empowering human resources through education, healthcare, social welfare, and other social services; 27.6 percent for economic services to fix the broken infrastructure network, boost agricultural and rural sector, and generate more jobs and livelihood; and 22 percent for general public services and defense. The Department of Education will receive the biggest share among government agencies, with a proposed amount of P567.6 billion. This is followed by the Departments of Public Works and Highways (P458.6 billion), Interior and Local Government (P150 billion), National Defense (P134.5 billion), Social Welfare and Development (P129.9 billion), and Health (P94 billion). Completing the top 10 list are State Universities and Colleges (P58.8 billion), Department of Transportation (P55.5 billion), DBM (P45.3 billion), and the Autonomous Region in Muslim Mindanao (P41.8 billion). The Office of the President’s proposed 2017 budget also saw a substantial increase of 600 percent to P20 billion from this year’s allocation of P2.9 billion. “P15 billion is for hosting the 50th Asean anniversary celebration next year,” said Benjamin Diokno, Budget secretary. “It will be distributed to the concerned agencies during budget implementation,” he added. The total proposed budget for infrastructure is P860.7 billion or 13.8 percent higher than this year’s budget. READ MORE...RELATED, Economy grows, but many don’t feel gains...

ALSO: STANDARD EDITORIAL - Budget for real change
[ALSO: TRIBUNE EDITORIAL - Where’s the economic blueprint?


AUGUST 17 =THE Duterte administration submitted its first budget proposal this week, a spending plan for 2017 that tops out at P3.35 trillion, 11.6 percent higher than the P3.018-trillion budget for 2016 passed during the previous administration. The higher budget makes sense if we accept the argument that the previous administration woefully underspent on infrastructure, which will be a key focus of the 2017 spending plan. The Department of Public Works and Highways, for example, will see its budget rise to P860.7 billion, P19.5 billion more than its allocation for 2016. The allocation is significant, in that it represents 5.4 percent of gross domestic product (GDP), suggesting we are finally investing as much as our Southeast Asian neighbors on infrastructure.Some P355.7 billion will be allocated to transport infrastructure such as railways, seaports, airports and road networks. Some P31.5 billion will be set aside for the Mindanao Logistics Infrastructure network to lower the cost of logistics in the region, while P75.8 billion will fund flood control systems.
The administration also promises to revitalize public-private partnership (PPP) projects, which were dismally slow to take off under the Aquino administration. The 2017 budget also shows that the administration will invest more in people. Education will have the biggest chunk of the budget, with an allocation of P699.95 billion, or 20.9 percent of the total spending plan. The Department of Education will get P570.4 billion, a 31 percent hike from its 2016 allocation, and will include a P2.8 billion allotment for hiring 53,831 additional teachers and P124.6 billion for the construction and replacement of 37,500 classrooms, particularly for Senior High School. “If we are to compete with the rest of the world, then the government must invest more for its greatest resource—its people,” President Rodrigo Duterte said in his budget message. READ MORE...ALSO, TRIBUNE EDITORIAL - Where’s the economic blueprint?...

ALSO: Palace on scrapping VAT exemption of PWDs, seniors - Not final yet
[ALSO: ‘SIMPLE’ FILIPINO ASPIRATION NEEDS DOUBLING OF INCOME]


AUGUST 17 -Persons with disabilities and senior citizens may lose VAT exemptions to make up for revenue losses that will result from the lowering of corporate and individual income tax rates. MICHAEL VARCAS, File
There is nothing final yet regarding proposals to remove value added tax (VAT) exemptions of persons with disabilities (PWDs) and senior citizens, Malacañang clarified Wednesday. The Finance department wants to lift certain VAT exemptions to make up for revenue losses that would result from the lowering of corporate and individual income tax rates. Some lawmakers are against the proposal, which they described as difficult and “too ambitious.” Presidential spokesman Ernesto Abella said the proposal to take away VAT exemptions would still be subject to further discussions. “There were talks about it but nothing is final yet. There (is a need to hold) discussions and to work out the details discussed,” he said. According to Abella, the proposed removal of some VAT exemptions is “a question of household accounting” as he cited the need to cover for the revenues to be taken away by lower income tax rates. In his budget message, President Rodrigo Duterte said the executive would propose a package of reform measures to generate additional revenues without burdening the poor. The tax measures to be proposed include the lowering of income tax rates for individuals and corporations from 32 percent and 30 percent, respectively, to 25 percent, indexing oil excise taxes to inflation, rationalizing of fiscal incentives and expanding the VAT base. READ MORE...ALSO, ‘SIMPLE’ FILIPINO ASPIRATION NEEDS DOUBLING OF INCOME...

ALSO: UPBEAT START - GDP hits 7% in Q2 2016
[RELATED: NO NEED FOR EXTRA MONETARY STIMULUS, ECO MANAGERS VOW TO SUSTAIN GROWTH]


AUGUST 18 -The Q2 growth is an upbeat start for the Duterte administration, Socioeconomic Planning Secretary Ernesto Pernia said. File photo
The country's gross domestic product (GDP) expanded by 7 percent during the second quarter of 2016, the Philippine Statistics Authority (PSA) announced Thursday. The Q2 growth is an upbeat start for the Duterte administration and is within market expectations, according to Socioeconomic Planning Secretary Ernesto Pernia. Pernia said the Philippines likely remains the fastest or at least second fastest growing economy in the second quarter of 2016 among the major emerging economies in Asia followed by China (6.7 percent), Vietnam (5.6 percent), Indonesia (5.2 percent) and Malaysia (4.0 percent). GDP is the sum total of all goods and services produced within an economy in a given period. RELATED: Phl GDP hits 6.9% in Q1 2016, fastest among major Asian economies
The growth in Q2 was driven by the services sector which expanded by 8.4 percent compared to the 6.7 percent in the same period last year. "Among the three major economic sectors, services gave the highest contribution to the GDP growth in Q2 accounting for 4.8 percentage points," the PSA said. This was followed by the industry sector which grew by 6.9 percent. READ MORE...RELATED, NO NEED FOR EXTRA MONETARY STIMULUS, ECO MANAGERS VOW TO SUSTAIN GROWTH...

ALSO: Ongpin donates P4.6-B PhilWeb shares to Pagcor
[RELATED: Pagcor rejects Ongpin’s last-ditch offer]
[RELATED(2): Ongpin makes final bid to rescue PhilWeb]


AUGUST 18 -Businessman and former trade minister Roberto Ongpin, who owns 771.7 million shares in PhilWeb, equivalent to a 53.76 percent stake, commenced an open auction of his shares last week to take the heat off the company after President Duterte named him as an oligarch who must be destroyed. He said the tag struck him like lightning. STAR/File photo
In a move to save PhilWeb, businessman and former trade minister Roberto Ongpin has decided to donate 49 percent of his shares to the Philippine Amusement and Gaming Corp. (Pagcor) – valued at roughly P4.6 billion based on yesterday’s closing price – in hopes of getting the gaming regulator to renew the company’s license. A new lease on life for PhilWeb would save the jobs of some 6,000 employees. Ongpin, who owns 771.7 million shares in PhilWeb, equivalent to a 53.76 percent stake, commenced an open auction of his shares last week to take the heat off the company after President Duterte named him as an oligarch who must be destroyed. He said the tag struck him like lightning. The auction, which started on Aug. 10 when PhilWeb’s license from Pagcor expired, ended at noon yesterday. Ongpin said he received five bids for his shares but could not award these to any of the bidders because of Pagcor’s pronouncements that it would not renew PhilWeb’s license. In a move that surprised the company’s officials and employees, Ongpin decided to just donate his shares to the gaming regulator. READ MORE...RELATED,
Pagcor rejects Ongpin’s last-ditch offer... RELATED(2), Ongpin makes final bid to rescue PhilWeb...


READ FULL MEDIA REPORTS HERE:

2017 BUDGET SWINGS TO SOCIAL SERVICES

MANILA, AUGUST 22, 2016 (MALAYA BUSINESS INSIGHT) By ANGELA CELIS August 16, 2016 - The 2017 government budget presented by the Duterte administration to Congress yesterday is 12 percent higher than this year, sets more social services,is static on economic services and about three percent of the expected gross domestic product (GDP).

The government plans to spend more than what it will earn next year compared with this year’s deficit cap of 2.7 percent, but more prudent than what was earlier announced.

The budget was also submitted late than usual. The General Appropriations Act is usually submitted right after the president says the State of the Nation Address which was done July 25. The constitution, however, gives the President, 30 days after SONA to submit the budget.

President Duterte in his budget message said his priority is to implement programs that would benefit the poorest and that Congress must scrutinize the budget with the interests of the marginalized in mind.

The Department of Budget and Management (DBM)pegged next year’s budget at P3.35 trillion.

The 2017 budget is 11.6 percent higher than the P3.002 trillion allocated this year.

The Duterte administration’s first proposed budget is called “A Budget for Real Change,” as it focuses resources on programs and projects that aim to achieve the government’s 10-point socioeconomic development agenda.

Of the proposed budget for 2017, DBM said 40 percent will be for empowering human resources through education, healthcare, social welfare, and other social services; 27.6 percent for economic services to fix the broken infrastructure network, boost agricultural and rural sector, and generate more jobs and livelihood; and 22 percent for general public services and defense.

The Department of Education will receive the biggest share among government agencies, with a proposed amount of P567.6 billion.

This is followed by the Departments of Public Works and Highways (P458.6 billion), Interior and Local Government (P150 billion), National Defense (P134.5 billion), Social Welfare and Development (P129.9 billion), and Health (P94 billion).

Completing the top 10 list are State Universities and Colleges (P58.8 billion), Department of Transportation (P55.5 billion), DBM (P45.3 billion), and the Autonomous Region in Muslim Mindanao (P41.8 billion).

The Office of the President’s proposed 2017 budget also saw a substantial increase of 600 percent to P20 billion from this year’s allocation of P2.9 billion.

“P15 billion is for hosting the 50th Asean anniversary celebration next year,” said Benjamin Diokno, Budget secretary.

“It will be distributed to the concerned agencies during budget implementation,” he added.

The total proposed budget for infrastructure is P860.7 billion or 13.8 percent higher than this year’s budget.

READ MORE...

“We have proposed that P355.7 billion of the budget for infrastructure be spent for fixing and building road networks, railways, seaports systems, and airport systems,” Diokno said.

“The infrastructure outlays in 2017 is equivalent to 5.4 percent of the GDP. This would eventually make the Philippines at par with its Asean neighbors by the end of this administration,” he added.

The DBM has given the Mindanao Logistics Infrastructure Network P31.5 billion, higher than this year’s allocation of P19.5 billion, as part of the Duterte administration’s promise to pay equal attention to connecting lagging regions with growth centers.

Meanwhile, to support the administration’s drive against crime, illegal drugs, and terrorism, the budgets for the Philippine National Police (PNP) and Armed Forces of the Philippines (AFP) were increased substantially.

The PNP will receive P110.4 billion, higher by 24.6 percent than in 2016, to hire more policemen, acquire more guns and patrol vehicles, and finance other activities for more effective crime suppression.

The AFP will receive P130.6 billion, which is 15 percent higher than 2016, to intensify its counter-terrorism efforts and to protect the country’s borders. The Revised AFP Modernization Program will have P25 billion to give soldiers more weapons and equipment.

To declog the courts by creating more Halls of Justice and implementing the Enterprise Information System, P32.5 billion will be set aside for the Judiciary, which is higher by 21.5 percent than in 2016.

Meanwhile, for its first budget, the Department of Information and Communications (DICT) will receive P3.56 billion to address ICT matters including internet speed, electronic-related crimes, and to mainstream ICT in schools and manpower development programs.

The Duterte administration is projecting a deficit ceiling of P478.1 billion in 2017, equivalent to three percent of GDP.

The budget shortfall cap for this year is pegged at P388.9 billion or 2.7 percent of GDP.

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

RELATED FROM THE INQUIRER

Economy grows, but many don’t feel gains By: Ben O. de Vera, Kristine Felisse Mangunay @inquirerdotnet Inquirer Bureaus, Philippine Daily Inquirer 01:09 AM August 19th, 2016

Sustained strong domestic demand coupled with robust election-related spending boosted economic growth in the second quarter to its fastest in over two years, but many Filipinos said they did not feel the benefits of the expansion.

The Philippine economy as measured by the gross domestic product (GDP)―the total value of goods produced and services rendered in a given period―grew 7 percent in the last three months of the Aquino administration, said national statistician Lisa Grace S. Bersales.

“Among the major Asian emerging economies, the Philippines likely remains the fastest, or second-fastest-growing, economy in the second quarter of 2016, followed by China, which grew by 6.7 percent, Vietnam by 5.6 percent, Indonesia by 5.2 percent, Malaysia by 4.0 percent and Thailand by 3.5 percent,” Socioeconomic Planning Secretary Ernesto M. Pernia said at a press conference.

Economists cheered the country’s better-than-expected second quarter GDP growth rate of 7 percent but braced for slower growth for the remainder of the year without the extraordinary boost from election spending.

Lucy Nicdao, a suman (rice cake) vendor, of Guagua town in Pampanga, reacted with disbelief when told that government recorded a 7-percent economic growth.

The 43-year-old mother of two said the P300 daily earning she and her husband was making had not increased in the last three years and was just enough to get them by.

“I don’t feel that the economy has improved. Perhaps that’s because disasters like floods often hit us,” said Nicdao, who on Thursday lined up for food packs from the provincial government.

Ronnie Fernandez, 41, an ambulant vendor in Lucena City, said that for someone who is in the streets every day to find a way to provide for his family, “news that the country’s economy has improved is a lie.”

“I do not know about GDP growth rate, but ask me how much the price of rice, of dried fish has increased. That’s what I know because I need to struggle hard for my family every day,” he said.

Bersales said government and household expenditures related to the national elections in May boosted the industry and services sectors, specifically printing and publishing, land, motor and air transport, communications, wholesale and retail trade, as well as hotels and restaurants.

ING economist Joey Cuyegkeng said the government and the private sectors were likely to continue to expand the absorptive capacity of the economy.

“The forthcoming tax reform package hopefully contributes to a net increase in disposable income which would be quite positive for the economy,” he said.

Pernia said the government was on track to attain the 6- to 7-percent growth target of the administration for 2016, as the first semester average stood at 6.9 percent.

“The previous administration gave us a strong and stable economy that we can build on further by maintaining the sound macroeconomic, fiscal, and monetary policies already in place. It is also encouraging to note that the growth has been investment-driven,” he said.

Still, “the challenge is to make this growth inclusive so that more people contribute to, and benefit from it,” he said.

Pernia said the Duterte administration was particularly concerned about the farming and fisheries sector, which accounted for about 10 million workers and their families.

“Knowing that the majority of poor Filipinos rely on this sector for their livelihood, this administration will prioritize agricultural development,” he said.

The sector declined 2.1 percent from April to June, the fifth consecutive quarter of declines.

Anong Manalo, 65, of Dagupan City, said farmers like him did not feel the economic growth. “We are at the very bottom [of society]. Government does not give us any importance,” he said.

In Baguio City, an events organizer said his business had not benefited from the announced economic growth. Gregory Rugay, who is in his 50s, said he did not see his profits rise.

“Prices of basic goods and services and electricity have not gone down. I could not even visit my family in Mindanao because it is very expensive to travel now compared to the past years,” Rugay said.

Leslie Ann Alvarez, 18, a former factory worker from Los Baños town in Laguna province, said she did not feel any impact of the growing economy although she was hoping Mr. Duterte could do something about poverty.

“Life is becoming more difficult instead,” for Armando Dayrit, director of Mangyan Kalakbay Mission in Baco town, Oriental Mindoro province.

For 40-year-old job recruiter Rolly dela Peña of Koronadal City, life has not improved because the cost of living remains high.

“The series of oil price rollback has no impact on the prices of food products. We are yet to recover from the impact of the dry spell, we are yet to recover from rice farming failures in previous cropping,” he said.

A few attested to seeing their incomes grow because of the economic expansion.

Gabriel Colacion, 38, a taxi driver in Iloilo City, said his income improved because there were more passengers. “More businessmen are coming here and new subdivisions have opened.”

Life is better these days for Hazel Panlita, 35, a broker in Tagbilaran City. “For the economy, yes, more investors are coming in.”

Miraflor Lawangon, 41, operator of Wow Bohol Travel and Tours, Tagbilaran City, said her income from tourism had increased as a result of the increase in the number of tour bookings. With reports from Doris Dumlao-Abadilla in Manila; Tonette Orejas, Inquirer Central Luzon, and Gabriel Cardinoza and Kimberlie Quitasol, Inquirer Northern Luzon; Maricar Cinco, Fernan Gianan, Michael Jaucian, Delfin T. Mallari Jr., Madonna T. Virola, Mayda Lagran, Inquirer Southern Luzon; Nestor P. Burgos Jr., Carmel Loise Matus and Leo Udtohan, Inquirer Visayas; Jigger Jerusalem, Orlando Dinoy and Edwin Fernandez, Inquirer Mindanao; Ana Roa, Inquirer Research; and AFP


MANILA STANDARD EDITORIAL

Budget for real change posted August 17, 2016 at 12:01 am

THE Duterte administration submitted its first budget proposal this week, a spending plan for 2017 that tops out at P3.35 trillion, 11.6 percent higher than the P3.018-trillion budget for 2016 passed during the previous administration.

The higher budget makes sense if we accept the argument that the previous administration woefully underspent on infrastructure, which will be a key focus of the 2017 spending plan.

The Department of Public Works and Highways, for example, will see its budget rise to P860.7 billion, P19.5 billion more than its allocation for 2016. The allocation is significant, in that it represents 5.4 percent of gross domestic product (GDP), suggesting we are finally investing as much as our Southeast Asian neighbors on infrastructure.

Some P355.7 billion will be allocated to transport infrastructure such as railways, seaports, airports and road networks. Some P31.5 billion will be set aside for the Mindanao Logistics Infrastructure network to lower the cost of logistics in the region, while P75.8 billion will fund flood control systems.

The administration also promises to revitalize public-private partnership (PPP) projects, which were dismally slow to take off under the Aquino administration.

The 2017 budget also shows that the administration will invest more in people.

Education will have the biggest chunk of the budget, with an allocation of P699.95 billion, or 20.9 percent of the total spending plan. The Department of Education will get P570.4 billion, a 31 percent hike from its 2016 allocation, and will include a P2.8 billion allotment for hiring 53,831 additional teachers and P124.6 billion for the construction and replacement of 37,500 classrooms, particularly for Senior High School.

“If we are to compete with the rest of the world, then the government must invest more for its greatest resource—its people,” President Rodrigo Duterte said in his budget message.

READ MORE...

It is a sentiment we can all rally behind—as is the administration’s plan to revitalize the agricultural sector, after mismanagement and corruption from the previous administration took their toll on farm output.

We also laud the increase in the budget to carry out the Reproductive Health Law, an effort that the previous administration pursued only half-heartedly.

Budget Secretary Benjamin Diokno described the spending plan as “a budget for real change” and all the way funds have been allocated indicate that this is true.

The spending plan, however, is only half the equation. As we have seen time and again during the Aquino administration, even the best laid plans can be torpedoed by corruption, sheer incompetence or both.

With a new budget in the works, it is time the Duterte Cabinet show us that it is capable of executing these plans with economy and efficiency. There is where true change lies.

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

ALSO TRIBUNE EDITORIAL

Where’s the economic blueprint? Written by Tribune Editorial Thursday, 18 August 2016 00:00



The highest increases in the proposed first full year budget of President Duterte were not what was widely expected to reflect his administration’s thrust to develop the sectors that the past administration of Noynoy neglected such as agriculture on which majority of Filipinos depend.

Presented as the budget support for the 10-point economic agenda of Duterte were infrastructure, P60.7 billion which is 13.8 percent higher than this year’s budget; rule of law, P110.4 billion for the Philippine National Police (PNP) which is 24.6 percent higher than this year and P130.6 billion for the Armed Forces of the Philippines to support the administration’s drive against crime, illegal drugs and terrorism, and P32.5 billion to declog the courts; agriculture and agrarian reform P120.5 billion; technology and innovation, P3.56 billion for the Department of Information and Communications and P20.8 billion for the Department of Science and Technology; education, P699.95 billion; health, P151.5 billion; social welfare and sustainable livelihood, P129.9 billion for the Department of Social Welfare and Development and P13.5 billion for the Department of Labor and Employment; energy, PP5.6 billion for electrification; and disaster risk reduction and environmental protection, P37.3 billion for the National Disaster Risk Reduction and Management Fund and P29.4 billion for the Department of Environment and Natural Resources.

Also the National Expenditure Program or the Palace 2017 budget proposal seeks a ten-fold increase in the budget for the Office of the President to P20 billion from P2.8 billion this year.

Under Executive Order 1, the first issued by Duterte, the Cooperative Development Authority, Housing and Urban Development Coordinating Council, National Anti-Poverty Commission, National Commission on Indigenous Peoples, National Commission on Muslim Filipinos, National Food Authority, National Youth Commission, Office of the President-Presidential Action Center, Philippine Commission on Women, Philippine Coconut Authority, Presidential Commission on the Urban Poor and the Technical Education Skills Development Authority were all placed under the Office of the President.

The main poverty intervention tool which is the conditional cash transfer (CCT) program was also bumped up to P78.7 billion from P62 billion this year.

The NEP said the amount targets the coverage of 4.62 million family beneficiaries while P23.4 billion will be allocated for rice subsidy to 3 million poorest families in the country.

Unless changes are instituted in the CCT, however, its impact on the poverty situation will remain as negligible as before.

The poverty level under the administration of Noynoy remained at a constant 25 percent through the entire six years he was in power despite the billions of pesos allotted to the CCT program.

Since the budget should be a reflection of the policy focus of the government, the Duterte administration is expected next year to remain focused on the war on drugs with the huge increase in the budget of the PNP.

Duterte had said that the concerns on the narcotics trade and the overall peace and order situation would have stabilized after six months of his presidency that will allow his administration to focus on other problems of the country.

The 2017 budget, however, does not show the Duterte commitment and at the same time his supposed attention to other problems confronting the nation.

Even the promised massive infrastructure buildup that Duterte’s economic managers said would result in a 24/7 construction of government projects was not discernible in the proposed 2017 budget.

Budget Secretary Ben Diokno earlier said the economy is “deficient in all types of infrastructure.”

The DBM is committed to hike infrastructure spending from a low five percent to a high of six to seven percent of the gross domestic product (GDP) next year.

The total proposed budget for infrastructure is P860.7B or 13.8 percent higher than this year’s budget but it represents 5.4 percent of the GDP which is not much of a change from the outlays during the previous administration that Diokno accused of underspending the budget.

The lack of a clear economic roadmap was among the most raised criticism on the administration of Noynoy.

Based on the 2017 budget there appears to be little or no change coming.


PHILSTAR

Palace on scrapping VAT exemption of PWDs, seniors: Nothing final yet By Alexis Romero (philstar.com) | Updated August 17, 2016 - 4:15pm 2 38 googleplus0 0


Persons with disabilities and senior citizens may lose VAT exemptions to make up for revenue losses that will result from the lowering of corporate and individual income tax rates. MICHAEL VARCAS, File

MANILA, Philippines — There is nothing final yet regarding proposals to remove value added tax (VAT) exemptions of persons with disabilities (PWDs) and senior citizens, Malacañang clarified Wednesday.

The Finance department wants to lift certain VAT exemptions to make up for revenue losses that would result from the lowering of corporate and individual income tax rates. Some lawmakers are against the proposal, which they described as difficult and “too ambitious.”

Presidential spokesman Ernesto Abella said the proposal to take away VAT exemptions would still be subject to further discussions.

“There were talks about it but nothing is final yet. There (is a need to hold) discussions and to work out the details discussed,” he said.

According to Abella, the proposed removal of some VAT exemptions is “a question of household accounting” as he cited the need to cover for the revenues to be taken away by lower income tax rates.

In his budget message, President Rodrigo Duterte said the executive would propose a package of reform measures to generate additional revenues without burdening the poor.

The tax measures to be proposed include the lowering of income tax rates for individuals and corporations from 32 percent and 30 percent, respectively, to 25 percent, indexing oil excise taxes to inflation, rationalizing of fiscal incentives and expanding the VAT base.

READ MORE...

The tax reform package was discussed during Duterte’s meeting with senators at the Palace last Monday.

RELATED: Seniors, PWD may lose VAT exemption

Senate Minority Leader Ralph Recto, one of the senators present during the meeting, said the government may lose P75 billion in tax revenues once individual and corporate income tax rates are lowered.

According to Recto, the lifting of some VAT exemptions would generate around P600 billion, an amount that he described as “too high.”

Senate Ways and Means Committee Vice Chairman Sen. Joel Villanueva is also against the removal of VAT exemptions of PWDs and senior citizens and is instead pushing for a tax on sugary beverages and better tax administration.

The Duterte administration is also eyeing the removal of VAT exemptions on agricultural products in its original state, livestock and export.

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

RELATED FROM MALAYA BUSINESS INSIGHT

‘SIMPLE’ FILIPINO ASPIRATION NEEDS DOUBLING OF INCOME By ANGELA CELIS August 18, 2016

The Filipino dream of ‘simple’ living would require doubling of per capita income to attain according to Ernesto Pernia, National Economic and Development Authority director general .

Pernia said that to meet the Filipino’s aspiration of owning a house, a car, college education for children and vacation time would need per capita income of P30,000 from the present P13,000.

Pernia in his presentation at the Social Development Initiatives Summit yesterday also pointed out that even if the economy expanded by 43 percent over the last six years, poverty incidence fell by only eight percent from 28.6 percent in 2009 to 26.3 percent last year.

Pernia said that while poverty reduction in the country is accelerating, it lags behind real growth.

“Part of the explanation for this puzzle is the imbalance in the distribution of the benefits of this economic expansion, across regions as well as across sectors,” Pernia said.

He added that the significant increase in food prices, particularly of rice, also pushed up the poverty line by almost 30 percent over the last six years.

“The fast pace of population growth, with an additional 10 million Filipinos in just six years, also makes poverty reduction more challenging,” he said.

“Clearly, economic growth was uneven. But the biggest criticism is that the benefits of economic growth have not been felt on the ground,” he added.

Pernia said that NEDA’s response to this criticism is a national survey called, Ambisyon Natin 2040.

READ MORE...

The objective of the survey was to determine the aspirations of Filipinos so that development plans can be formulated such that they help Filipinos achieve their aspirations.

Majority of Filipinos aspire for a simple and comfortable life (79 percent) in 2040, followed by a smaller segment of the population who want an affluent life (16.9 percent) while a very small portion aspire for the life of the rich (3.9 percent).

For Filipinos, NEDA said that a simple and comfortable life is described as having a medium-sized home, having enough earnings to support everyday needs, owning at least one car/vehicle, having the capacity to provide their children college education; and going on local trips for vacation.

Pernia however said, that these are not so modest aspirations.

“Our rough estimate is that it would require a family income of about P120,000 (per month) to support such a standard of living,” Pernia said.

“That would be equivalent to P30,000 per capita income, or more than double the current per capita income of about P13,200,” he added.

However, Pernia said that with a comprehensive economic and social policy in place, the effective cost of mobility, food, shelter, education, leisure, and tax burden can be reduced substantially, to a required monthly family income of about P57,000.

This, he said, will make it easier for Filipinos to achieve their aspirations.

“The current middle class average income for a family of five is P45,700. To reach P120,000 by 2040, this income level would have to grow by 2.6 times,” Pernia said.

“To reach P57,000 by 2040, incomes would have to grow by a more achievable 1.25 times,” he added.

Pernia said that for fiscal policy, apart from supporting macroeconomic stability, the spending program should strategically address capacity constraints, increase competitiveness, encourage innovation, reduce inequality, and build up resiliency.

“On the other hand, monetary and financial sector policy should support low and stable inflation, steady growth, and financial inclusion,” he said.

The NEDA chief said that the regulatory policy should be geared towards promoting competition, reducing externalities and the cost of doing business, ensuring consumer protection as well as justice security and peace.

“(Lastly,) an enabling social policy should help our young citizens avoid or at least recover from child marriage, leaving school, repeat pregnancies, child illness, maternal morbidity, informal work, insecurity and displacement,” Pernia said.


PHILSTAR

GDP hits 7% in Q2 2016 (philstar.com) | Updated August 18, 2016 - 1:09pm 2 204 googleplus0 0


The Q2 growth is an upbeat start for the Duterte administration, Socioeconomic Planning Secretary Ernesto Pernia said. File photo

MANILA, Philippines — The country's gross domestic product (GDP) expanded by 7 percent during the second quarter of 2016, the Philippine Statistics Authority (PSA) announced Thursday.

The Q2 growth is an upbeat start for the Duterte administration and is within market expectations, according to Socioeconomic Planning Secretary Ernesto Pernia.

Pernia said the Philippines likely remains the fastest or at least second fastest growing economy in the second quarter of 2016 among the major emerging economies in Asia followed by China (6.7 percent), Vietnam (5.6 percent), Indonesia (5.2 percent) and Malaysia (4.0 percent).

GDP is the sum total of all goods and services produced within an economy in a given period.

RELATED: Phl GDP hits 6.9% in Q1 2016, fastest among major Asian economies

The growth in Q2 was driven by the services sector which expanded by 8.4 percent compared to the 6.7 percent in the same period last year.

"Among the three major economic sectors, services gave the highest contribution to the GDP growth in Q2 accounting for 4.8 percentage points," the PSA said.

This was followed by the industry sector which grew by 6.9 percent.

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The agriculture sector, however, was a poor performer declining by 2.1 percent. It pulled down the GDP growth with -0.2 percentage point. PSA said agriculture has been on the decline for five quarters already due to disasters, said Rosemarie Edillon, assistant director-general of the National Economic and Development Authority.

"While it is normal to see a slow down in the second semester during election years, possibly by 1.5-2.0 percentage points lower than the first half, the smooth transition of power and assurance of macroeconomic policy consistency and continuity by the new administration will likely keep business and consumer confidence strong to meet the full-year target," Pernia said.

He said that the challenge, however, is how to make the growth inclusive.

"Despite the good numbers for the first semester of 2016, there is still a risk of seeing lower growth in the second half of the year," Pernia said, adding that it is a normal occurrence during election years.

Pernia said that the new administration is aiming for a steady acceleration of growth towards 7 to 8 percent beyond this year, which will be supported by comprehensive reforms in tax, sustained investment in infrastructure, easing foreign invest restrictions, reduction of the cost of doing business and strengthening agri-industrial linkages.

RELATED: Duterte: More public spending, improved tax system to spur growth

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NO NEED FOR EXTRA MONETARY STIMULUS, ECO MANAGERS VOW TO SUSTAIN GROWTH August 19, 2016

The Bangko Sentral ng Pilipinas (BSP) yesterday said the country’s 7 percent annual growth in the second quarter supports maintaining policy settings and indicates the economy does not need additional monetary stimulus.

“We would expect that with ample liquidity and credit available in the system, higher domestic demand especially from stronger public spending will sustain our high growth path,” said Diwa Guinigundo, BSP deputy governor.

“With more confidence in the Philippines’ growth prospects and commitment to policy reforms, we are confident the growth targets for the next few years are very doable,” he said.

Since May 2015, the annual inflation rate has stayed below the bottom end of the central bank’s 2-4 percent target, allowing the monetary authority to keep policy steady since a 25 basis point hike in the main rate in September 2014


Dominguez

Carlos Dominguez, secretary of the Department of Finance (DOF) acknowledged the “good policies of both the Aquino and Arroyo administrations to sustain the country’s strong macroeconomic fundamentals that made this growth possible.”

“We aim to sustain and even boost this strong growth momentum by accelerating spending on infrastructure and investing heavily in human capital, along with overhauling the tax system and rationalizing fiscal incentives to further stimulate the economy,” Dominguez said.

“But we still have a big task ahead of us to lower the poverty rate that has been stuck at 26 percent of our population,” he added.

Besides investments in infrastructure and education, Dominguez said the government will also fully implement the Reproductive Health Law to realize the government’s goal of reducing the poverty rate from the current 26 percent to 17 percent by the time President Duterte steps down in 2016.

“We expect to continue this growth trajectory but with a difference from the previous administration because we will be reducing poverty rates,” Dominguez said.

Jingyi Pan, economist at Forecast Pte in Singapore said the administration’s focus on infrastructure and improving competitiveness “will likely keep growth on a healthy trend despite the global slowdown”.

She has pencilled in a 6.2 percent growth for the whole of 2016.

The new president wants to kick investment into high gear,” said Trinh Nguyen, economist at Natixis in Hong Kong. “Capital is finally being deployed to help the long-term potential of the country.”

Annual gross domestic product growth in April-June beat the first quarter’s 6.8 percent and a Reuters poll forecast of 6.7 percent, buoyed by campaign expenditures and an increase in public and private investments.

Metropolitan Bank and Trust Co., said it expects the second half economic growth to be slower than first six months’ as the election factor is removed from the next two quarters.

The lender also noted the base effects from the strong growth in third and fourth quarter last year.

“Consumption spending will remain robust amid the still soft commodity prices, low interest rates, and solid remittance inflows,” Metrobank said.

“Election spending is seen to have supported key services such as transportation, communication, and storage, business activities, and retail trade,” it added.

Metrobank said the slight improvement in the electronics exports towards the end of the year is expected to further underpin the manufacturing subsector growth.

“The agri sector will remain weak as amid unfavorable weather conditions.

Risks to the domestic economy remain amid the effects of the still uneven global economic growth and impact of financial market volatilities,” it said.

Metrobank said it is keeping its 6.3 per cent GDP full-year forecast for the year.


PHILSTAR

Ongpin donates P4.6-B PhilWeb shares to Pagcor By Iris Gonzales (The Philippine Star) | Updated August 18, 2016 - 12:00am 0 41 googleplus0 0


Businessman and former trade minister Roberto Ongpin, who owns 771.7 million shares in PhilWeb, equivalent to a 53.76 percent stake, commenced an open auction of his shares last week to take the heat off the company after President Duterte named him as an oligarch who must be destroyed. He said the tag struck him like lightning. STAR/File photo

MANILA, Philippines – In a move to save PhilWeb, businessman and former trade minister Roberto Ongpin has decided to donate 49 percent of his shares to the Philippine Amusement and Gaming Corp. (Pagcor) – valued at roughly P4.6 billion based on yesterday’s closing price – in hopes of getting the gaming regulator to renew the company’s license.

A new lease on life for PhilWeb would save the jobs of some 6,000 employees.

Ongpin, who owns 771.7 million shares in PhilWeb, equivalent to a 53.76 percent stake, commenced an open auction of his shares last week to take the heat off the company after President Duterte named him as an oligarch who must be destroyed. He said the tag struck him like lightning.

The auction, which started on Aug. 10 when PhilWeb’s license from Pagcor expired, ended at noon yesterday.

Ongpin said he received five bids for his shares but could not award these to any of the bidders because of Pagcor’s pronouncements that it would not renew PhilWeb’s license.

In a move that surprised the company’s officials and employees, Ongpin decided to just donate his shares to the gaming regulator.

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“I hereby donate to Pagcor or sell to Pagcor (for P1.00) 49 percent of my PhilWeb shares. Why 49 percent? This is simply to avoid PhilWeb being classified as a government-owned and controlled corporation which would make the various restrictions applicable to GOCCs (and) result in making PhilWeb’s operation untenable,” Ongpin said in a letter to Pagcor chief executive officer Andrea Domingo yesterday.

At yesterday’s closing price of P6.50, Ongpin’s 49 percent stake or around 702 million shares would amount to roughly P4.6 billion.

Ongpin said he is donating the balance of 4.7 percent to the Ateneo de Manila University JVO Scholarship Fund, named after his late brother, former Finance minister Jaime V. Ongpin. The Fund supports several hundred public elementary school graduates who could not otherwise afford to go to Ateneo.

The 4.7 percent donation to Ateneo is equivalent to 69 million shares valued at P448 million based on yesterday’s closing price.

In all, Ongpin’s donation is equivalent to over P5 billion based on yesterday’s closing price of P6.50 per share.

Based on the June 30 price of P24.40 per share, Ongpin’s donation would have valued at P18.5 billion.

“I am assuming that if Pagcor would own 49 percent of PhilWeb it would renew the license to itself and thus save the jobs and livelihood of about 6,000 employees and their families,” Ongpin said.

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RELATED FROM THE MANILA TIMES

Pagcor rejects Ongpin’s last-ditch offer BY KRISTYN NIKA M. LAZO ON AUGUST 18, 2016 TOP STORIES

STATE-RUN Philippine Amusement and Gaming Corp. (Pagcor) on Thursday rejected businessman Roberto Ongpin’s surprise offer to donate 49 percent of his shareholdings in gaming technology firm PhilWeb Corp., pointing to President Rodrigo Duterte’s order to shut down all forms of online gambling.

Pagcor’s decision is expected to lead to the closure of PhilWeb, whose license as technology provider to 286 Pagcor “e-Games” outlets nationwide has expired. An estimated 6,000 workers will lose their jobs.

“The issue is not [Ongpin] or PhilWeb per se. It is the President’s and his government’s opposition to on-line and on-site electronic gaming because of the social ills and decay they foist on our communities as they cater to the more economically vulnerable portion of our population,” Pagcor chief Andrea Domingo said in a statement.

“The campaign to correct or stop previous gaming policies that bring about such pernicious social conditions just had to start with PhilWeb, simply because its license had expired,” she added.

The Pagcor chairwoman said her agency would “deal with similar cases involving other parties accordingly.”

The decision came a day after Ongpin announced his last-ditch attempt to save PhilWeb by donating 49 percent out of his 53.76-percent shareholdings in PhilWeb to Pagcor.

This would have kept PhilWeb alive under Pagcor, which functions as regulator and casino and e-Games operator.

Ongpin had resigned as PhilWeb chairman and initially decided to get out of the company through a public auction of his stake.

Earlier, he said that PhilWeb, “with no income, will surely disintegrate before the end of this month of August.”
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KRISTYN NIKA M. LAZO

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RELATED FROM THE MANILA STANDARD

Ongpin makes final bid to rescue PhilWeb posted August 19, 2016 at 11:59 pm by Jenniffer B. Austria

Businessman Roberto Ongpin on Friday asked state-run Philippine Amusement and Gaming Corp. to use P20 billion worth of his shares in PhilWeb Corp. to build a nationwide network of drug rehabilitation centers.


Roberto Ongpin

Ongpin said in a letter to Pagcor chief executive Andrea Domingo the amended proposal was his final attempt to save PhilWeb and more than 6,000 jobs that would be affected by the non-renewal of the company’s gaming license.

“I am a firm believer in the president’s drive against the drug menace. And as he has pointed out, the elimination of drug lords and drug pushers will not succeed unless this is complemented by an effective drug rehabilitation program,” Ongpin said.

“While one could agree that gambling is undesirable, nothing could be more precocious than drug menace which destroys the very fabric of our youth and our society and which admirably, the President has chosen to be his first priority,” Ongpin said.

Ongpin said Pagcor could choose to accept his donated PhilWeb shares and thereafter sell the said shares to raise the money needed to build rehabilitation centers.

Ongpin said while his stake in PhilWeb was now worth between P4 billion and P5 billion after its share price dropped significantly over recent weeks, his 771 million PhilWeb shares could be worth as much as P20 billion under normal circumstances.

He said even before President Rodrigo Duterte named him as one of the country’s oligarchs that his administration wanted to destroy, PhilWeb had already engaged in a serious study of drug rehabilitation centers.

It identified a 2.1-hectare property near Atimonan, Quezon as an ideal site for rehabilitation site, he said.

Ongpin said PhilWeb also appropriated P100 million per year plus up to P3 million per month to maintain and sustain this rehabilitation center.

Ongpin on Wednesday offered to donate 49 percent of shareholdings in PhilWeb to Pagcor and the remaining 4.7 percent to Ateneo de Manila University JVO Scholarship Foundation.

Pagcor, however, rejected Ongpin’s offer citing the President Duterte’s stance against online or on-site electronic gaming.

“This issue is not RVO or PhilWeb per se. It is the President’s and his government’s opposition to on-line and on-site electronic gaming because of the social ills and decay they foist on our communities as they cater to the more economically vulnerable portion of our population,” Pagcor said.

Ongpin said he was hoping that Pagcor would finally accept his amended proposal.

“I hope that I will be forgiven for this one last attempt. It is a sincere attempt and no benefit whatsoever will accrue to me since I have already committed to donate all my shares,” Ongpin said.


Chief News Editor: Sol Jose Vanzi

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