BusinessMirror May 20, 2015

BusinessMirror

THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business TfridayNovember Wednesday, May18, 20,2014 2015Vol. Vol.1010No. No.40223

www.businessmirror.com.ph

P.  |     | 7 DAYS A WEEK

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HOUSE OKAYS ON FINAL READING FAIR COMPETITION ACT, CABOTAGE LAW AMENDMENTS

DOF, DTI harmonize Timta positions T HE Department of Finance (DOF) and the Department of Trade and Industry (DTI) have mended their conflicting positions on the proposed Tax Incentives Management and Transparency Act (Timta), with the submission of their joint version on Tuesday clearing the obstacles for the passage of the controversial measure.

INSIDE

EMAIL JOURNEY

Life

The divine shepherd

D

EAR Lord, being mostly a shepherding people, Israel enjoyed thinking of the Lord as its divine “Shepherd.” The pious Jews expressed their trust in God’s providential care and protection by singing: “The Lord is my Shepherd, I shall want for nothing...I shall fear no evil” (Psalm 23:1.4) And the Lord did take care of His “flock” in all circumstances. In most cases, however, He entrusted the ordinary care of Israel to human “shepherds:” the political and religious leaders of His people. These were expected to be the symbols and instruments of the fatherly concern which the divine shepherd showed for His people at all times. Amen.

EXPLORING GOD’S WORD, FR. SAL PUTZU SDB, AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

GUALBERTO C. MANLAGNIT’S GARDEN OF EARTHLY DELIGHTS »D4

BusinessMirror

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Wednesday, May 20, 2015

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A frustrating journey through today’s e-mail inbox B P M San Jose Mercury News

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FEW months back, apparently in a moment of spiritual weakness, I subscribed to a newsletter from DailyOM, a web site devoted to “Nurturing Mind Body & Spirit.”

I soon learned that they’d be nurturing me through an incessant stream of e-mails with subject lines like “Creating a Garden Sanctuary” and “Drumming.”

Realizing that I wasn’t ready to “Practice Surrender” via my Gmail inbox, I scrolled to the bottom of an e-mail in search of the 11 most beautiful letters in today’s English

language. Unsubscribe.

For the next 10 minutes, I tried to shake the shackles of DailyOM. Pre-exit choices abounded: No, I don’t want to “share The Om” nor make DailyOM my homepage nor publish DailyOM on my web site. OK, OK, I’ll go back and sign on to change my password so I can then unsubscribe, if you insist.

Ten minutes, which in modern-day e-mail-unsubscribing time is more like 37 hours. My DailyOM had become my DailyOMG! STOP!!! Like a bad pop song or an obnoxious pet video, junk e-mail continues to prove a cultural thorn in our collective side. Managing the deluge is hard enough, but companies messing with our heads while we’re trying to unhitch our

wagon and stop the inflow seems particularly cruel. I decided to explore the inner workings of what I call “The Unsubscribe”.

A FUNNY GOOD-BYE FOR the next hour, I tried to break free of dozens of other e-mail subscriptions that over the years had somehow gotten stuck to my online shoe like a wad of digital gum.

Most offenders offered a straightforward fix: a simple click or two let me know I was unsubscribed, even though in the back of my mind I worried that this was a dodgy ploy by the sender to verify my e-mail so they could sell it to 100 more marketeers.

C  D

LIFE

D1

EARTHLY DELIGHTS Art

BusinessMirror

D4 Wednesday, May 20, 2015

www.businessmirror.com.ph

House Committee on Ways and Means Chairman and Liberal Party (LP) Rep. Romero S. Quimbo of Marikina said Finance Secretary Cesar V. Purisima and Trade Secretary Gregory L. Domingo have signed their joint version of the Timta, which seeks to promote transparency and accountability in the grant and administration of tax incentives.

The draft version of the bill, or “An Act Enhancing the Current Tax

System by Implementing Measures that Ensure Transparency in the Management and Accounting of Tax Incentives Granted to Government and Non-government Entities,” was finalized during a meeting presided by Timta author LP Rep. Ma. Leonor Gerona-Robredo of Camarines Sur between the DOF and the DTI on Monday.

“I don’t want to preempt but we C  A

The CCP’s new 13 Artists named THE Cultural Center of the Philippines (CCP) has selected the awardees for the 2015 Thirteen Artists Awards (TAA). Now on its 16th year of conferment, 172 artists have been given recognition in the fields of painting, sculpture, mixed and multimedia and installation art. The 2015 Thirteen Artists awardees are Buen Abrigo, Martha Atienza, Zean Bajar Cabangis, Ernest Concepcion, Vermont Coronel Jr., Dexter Fernandez, Mark Andy Garcia, Nikki Luna, Hanna Pettyjohn, Mervy Pueblo, Mark Valenzuela, Alvin Zafra and Jeona Zoleta.

The TAA was first conceived in 1970 as a curatorial guide for an exhibition organized by thenCCP Museum Director Roberto Chabet. His intent was to identify artists, who took the “chance and risk to restructure, restrengthen and renew art making and art thinking....” It was later adopted as a biennial award by Chabet’s successor, Raymundo Albano.

This makes the TAA the oldest award program conferred by the CCP, two years ahead of the National Artist Award, which started in 1972.

Since 2009 the TAA has been a triennial award. It is administered by the CCP Visual Arts and Museum Division (VAMD) under the Production and Exhibition Department. During the two-month nomination period (between October to December 2014), 41 nominations were received from museum directors, gallerists, independent curators, heads of art and cultural organizations and former TAA awardees.

From the 69 artists nominated, 68 qualified and three artists did not submit their portfolios. This year’s panel of jurors included past TAA winners, namely Jaime de Guzman (1970), Mark Justiniani (1994), Julie Lluch (1990), Pam Yan-Santos (2009), with Boots Herrera, VAMD director, representing the CCP. Winners will receive a cash grant to defray cost of materials for producing new work for a group exhibition at the Bulwagang Juan Luna (Main Gallery). The exhibit opening on September 3 will be highlighted with the formal recognition of winners. This year’s exhibition will be curated by Jonathan Olazo and the trophy will be designed

by Juan Alcazaren, both TAA awardees (1994 and 2000, respectively).

Gualberto C. Manlagnit’s garden of earthly delights B T G V titovaliente@yahoo.com Uya pa ako U naghahalat saimo sa Baybay Sisiran sagkod pa man (Here i am waiting for you at Baybay Sisiran till the end)

—F  B    I    G M

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S in those lines, the works of Gualberto Cea Manlagnit are pictures in transit.

Even the quietest of scenes feel like something is about to happen, or someone is about to leave or has already left. The painter’s task then is to wait, and, as he waits, he conjures shapes primeval, images as old as the act of anticipating itself.

The artist paints clouds, seas, mountains and flowers

and plants. His clouds and seas are part of works that seem to be simulating memories of configurations. At first glance, they look like abstractions. But, once you stand away, the images are really realistic renderings of clouds and mountains and seas.

In a painting of clouds, two layers of white and dark gray are demarcated by a black swath. Red and yellow break out from the clouds with the lower layer closer to the mountains. The mood is quite somber. Can this be dawn or dusk? It really doesn’t matter; Manlagnit’s landscape or seascape invokes always an infinity, a space that offers no end.

In a composition that covers black mountains and an equally black shore, a body of water is dysenteric green, while, above, clouds of various formations occur. The artist appears to contemplate the shading of the clouds, their shift from one form to many other forms. Assuring that these are clouds, indeed, and not phantasms, a cluster on the upper left is recognizably clouds as we know them to be. Below that, however, is a jarring cloudlike pattern with jagged lines moving upward.

Manlagnit doesn’t wait when he paints flowers and plants. It seems these objects offer to the artist all their freedom, so that their colors and contours could be held captive. The proof of this conquest is in the manner by which the painter flattens the flowers, their hues the only vital signs, the only hope it seems for regeneration.

The yellows and the reds in these works are pure energies arresting our field of vision.

If these are leaves and flowers, then we are seeing them in their best tint. All courtesy of this artist, who never, as the poet Kristian Cordero explains, considered himself seriously as an artist. It doesn’t surprise those who know the artist if he mocks, in a bravely self-deprecating manner, his own art. That

The evolution of pyramiding and the ‘unwitting’ partners

doesn’t diminish his art; such act even underscores his own human vision of who we are before nature and other creations. Manlagnit was a raconteur, a poet, a composer, a politician.

Born on July 28, 1938, Manlagnit passed away on May 16, giving us artworks that bear no titles. In a sense, the artist has given us what he treasured most as an activist: freedom. We are now free, tremblingly perhaps, to confront the vision, these commodities of aesthetics and name them.

There are two works that he left and they need no labels. One is in monochrome green, save for a yellow where the pistil should be. The petals are green but that is not the unusual thing about this work. It is the seed, a bean, at the side of the flower/plant. The result is both witty and mystical as the artist illustrates without drama the story of growth.

Naif only in technique, Manlagnit outdid himself in a triptych—crude only in form, but not in content. He had the three panels connected by metal hinges. The first panel shows two figures, which I read as Adam and Eve. Two naked figures are in a massive garden that reaches up to the sky in all its greenness. An orange and red center has a globe floating above crags. At the uppermost portion of this middle earth is what looks like a page turned, signifying a story being told. On the right side uppermost floats a cloud and the figure of an old God, referenced and borrowed from ancient paintings of Genesis. The old God extends his hand, but no man is there to receive it. Look down, another circle, a body of land, carries the black figure of the devil.

In this story of creation, everyone waits. In the meditation of Manlagnit, the origin of faith is in the premonition, the expectation that the world will always be alright. n

Int’l reviews say ‘PHL Pavilion’ a must-see at Venice Biennale 2015 AT least four international reviews have chosen the Philippine Pavilion as a must-see national pavilion at the 56th International Art Exhibition of the Venice Biennale. The Philippine Pavilion— exhibiting Patrick D. Flores’s curatorial proposal, Tie A String Around The World, featuring the works of Manuel Conde and Carlos Francisco (for the film Genghis Khan), Jose Tence Ruiz (for the installation Shoal) and Manny Montelibano (for the multichannel video A Dashed State)—is making an impact in the world’s most prestigious contemporary art exhibition.

Art Radar, an editorially independent online news source on contemporary art across Asia; fine arts auction house Christie’s; ArtsHub, Australia’s leading portal for professionals working within the arts; and a-n The Artists Information Company, all included the Philippine Pavilion in their list of must-see national pavilions at the Venice Biennale 2015.

In selecting the Philippine Pavilion as part of its “10 Pavilions to See at the 56th Venice Biennale”, Art Radar said “the Pavilion offers a reflection on the world

today and its changing configurations— the volatile meanings of territory, country, nation, border, patrimony, nature, freedom, limit and the ‘present passing.’”

Christie’s, in its pick of the pavilions, says that, if one does not have time to visit all national pavilions at the 2015 Venice Biennale, the Philippine Pavilion is among its choice of must-see pavilions.

London-based artist and curator Pippa Koszerek made the “10 Must-See National Pavilions” list for a-n, a nonprofit organization that seeks to stimulate contemporary visual-arts practice and affirm the value of artists in society.

Koszerek included the Philippine Pavilion on the list and takes note of the country’s comeback after a 51-year hiatus. She said “the exhibition spans this gap, bringing together three generations of practitioners. Taking Manuel Conde and Carlos Francisco’s 1950s feature Genghis Khan as a starting point and curatorial reference, the exhibition also introduces work from Jose Tence Ruiz and Manny Montelibano, who both explore socioeconomic issues of sea nations, global politics and the volatility of borders through installation and film, respectively.” Meanwhile, ArtsHub cites

the Philippine Pavilion as among “The Best of the Venice Biennale 2015,” saying that “the Philippines has made a great comeback to the Biennale, after 50 years of absence.” Sen. Loren Legarda, the prime mover behind the Philippines’s comeback to the Venice Biennale, said “the attention the Philippine Pavilion has been receiving proves the readiness of the country’s curators and artists to be part of the global contemporary art scene.”

“We have a robust history of Philippine art and a lively contemporary art scene. Philippine contemporary art is vibrant and attuned to global developments. What it needs is a sustained effort to provide platforms so that it could further widen its perspective and interact more briskly with surrounding impulses,” Legarda added.

The Philippines’s return to the Venice Biennale, 51 years after its first participation in 1964, was made possible through the joint effort of the National Commission for Culture and theArts, the Department of Foreign Affairs and the Office of Senator Loren Legarda, and with the support of the Department of Tourism and the Tourism Promotions Board of the Philippines.

ART

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RAIL INSPIRATION BusinessMirror E1 | Wednesday, May 20, 2015 Editor: Tet Andolong

THE outside view of the train station

AN INSPIRATION FOR FUTURE

RAIL TRANSPORT STATIONS

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PIONEERING GROWTH

IN THE SOUTH

B R R R

OMMUTING in Metro Manila is definitely a horrific and hellish experience, wherein people must bear with a lot of inconveniences, resulting in the loss of productivity, time and mobility.

Although the government has been saying it is doing its best to resolve commuters’ woes, it will take a lot of years before it can provide the public with the so-called blissful commuting experience.

THE perspective of garden and open space

SANTA Rosa Business Park

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THE ARTIST’S perspective of open space

Elizelle David, a BS Architecture graduate of De La Salle University (DLSU)-College of Saint Benilde, developed her thesis based on the current condition of country’s rail networks. She hopes her study, which was part of the recent thesis exhibit in DLSU, can inspire the government to develop a more rationalized transport system in the future. From her daily inputs in riding the Metro Rail Transit, she decided to develop a topic thesis that could serve as guide for transit stations.

“From the start, I wanted my thesis topic to be something I’m really passionate about and, at the same time, something that would be relative to the issues of society. The inspiration for it came from my experience as a commuter, our planning classes in school and the unrealized potential of our transit networks. I heard about the proposal for the MRT Line 7 while researching and thought of the idea of planning an exemplar transit station as a guide for future models,” David told the BusinessMirror.

In the existing train system, David lamented the lack of maintenance that leads to broken train units and delays, uncontrolled congestion

2014 BS Architecture graduate Elizelle David

at the stations and outdated ticketing systems.

Furthermore, David said the government still has to confront even bigger concerns regarding the surrounding transit environment such as insufficient pedestrian facilities (such as sidewalks, shaded walkways and lighting fi xtures), sprawling vendors and disjointed developments. “The lack of connectivity to other transportation modes also contribute to the aggravation of everyday commuters and the unattractiveness of using public transportation,” David added.

To address these issues, David’s thesis utilized the concept of “transit-

oriented development,” a planning strategy developed by Peter Calthorpe, which she integrated into the local context and merged with additional design strategies. The result is a pedestrian-oriented, mixed-use environment around the train station that creates a welcoming and uplifting experience for commuters and members of the community.

She said the design output aims to provide convenience to commuters using three elements—workability, connectivity and inclusivity. Walkability is manifested through the implementation of adequate walkways, provision of canopies, vegetation and lamp posts, short block sizes and layouts, strategic placement of retail and public amenities, and perceived safety and security through design.

David said connectivity comes in the form of an urban design innovation called the “transit plaza,” which are transport nodes that serve as formal loading and unloading points of different forms of public transportation (buses, jeeps, sidecars and tricycles) placed within proximity of the transit station. She said this will form a cohesive transit network that provides a comfortable and organized

transfer from one mode to another.

Moreover, it is also expressed by the implementation of the accessibility law for disabled persons, and the promotion of cycling as a sustainable means of travel.

“My thesis was designed not just for the high-income or low-income population but for all socioeconomic levels,” she said.

Given the chance, she would like to submit her thesis to government sectors and private developers so that they would become aware of the importance of the public transit systems and provide ideas on how to build around these networks and harvest their potential.

She shared her gratitude to her alma mater for stressing the six core values that guide her in life.

“As Benildeans, we were taught to always exercise the six core values in all that we do. For my thesis, I can say that I applied two out of the six: social responsibility, through the inclusion of all social classes; and sense of nationhood, through the integration of local elements and the provision of a better and sustainable transit environment for all Filipinos,” David pointed out.

HERE is a place, south of Metro Manila, where a complete lifestyle can be enjoyed in the middle of open fields and verdant greens.

Set in the lion city of the South,— as Santa Rosa, Laguna is a pioneering 400-hectare, self-sustaining network of mixed-use communities. Greenfield City, dubbed as the “city within a park,” is a development by Greenfield Development Corp. (GDC). It has helped shape the Santa Rosa landscape by seamlessly merging commercial spaces, residential parks, industrial zones and business districts.

In 1991 the early groundwork began. “The company has always endeavored to create value for its developments through road linkages,” said lawyer Duane AX Santos, GDC general manager and executive vice president.

Thus, it unlocked its properties through major infrastructure developments and interchanges, with the Mamplasan, Cabuyao and Southwoods exits put in place. “Not only were we creating value for our real estate, we helped diversify the roads and increase mobility in the south,” Santos added.

It was a game-changer when Paseo, the pioneer outlet shopping mall, was opened in 1998 as part of the design plan. As a lifestyle hub, more families saw the value of driving down to Laguna. Just a few minutes away from

Tagaytay, it became a must-see pit stop before heading farther south.

As more establishments were set-up, “the country’s first outlet mall” quickly became a weekend destination for urban dwellers looking for bargain finds and good food.

Aside from Paseo, industrial zones and residential parks were also developed. The city center’s unique design puts a premium on open spaces and offers a refuge for those looking for a refreshing shift of scenery outside the urban jungle.

“This city is patterned after a parkliving concept where much of the space is devoted to lush greens,” Santos explained. “We wanted those who work and reside here to experience suburban bliss with wide open spaces, parks, playgrounds and tree-lined roads.”

These developments have become synonymous to Santa Rosa, Laguna, itself and have set the bar for other developers who followed suit. With a keen vision to build sustainable development, Santos affirmed that the company saw such potential in the land early on.

This city-park complex is a first of its kind in Santa Rosa, and has definitely helped redefine living in the suburbs.

“This project has added value to the land since it started in the late 1990s and has contributed significantly to the growth of Santa Rosa,” Santos concluded.

CBRE Philippines cited inAsia Pacific Property Awards F

OR the fourth consecutive year, CBRE Philippines has kept its winning streak by bagging several awards in the recently concluded Asia Pacific Property Awards (APPA) in Kuala Lumpur.

CBRE won the five-star Best Lettings Agency Philippines, five-star Best Real Estate Agency Marketing Philippines, five-star Best Real Estate Agency Philippines and Highly Commended Property Consultancy Philippines.

Furthermore, CBRE Philippines garnered two regional nominations for Best Lettings Agency and Best Real Estate

Agency Marketing for Juan Luna, competing with representatives from other countries in the Asia-Pacific region.

If CBRE wins the award, it will then compete in the international level of the awards, together with the highest-scoring winners from Europe, Africa, Canada, the US, Central and South America, the Caribbean and Arabia to find the ultimate “World’s Best” in each category in December.

The awards are conferred by the renowned International Property Awards (IPA), a London-based organization that has been recognizing outstanding firms,

projects and services in the global residential and commercial real-estate industry for almost 20 years.

Among local real-estate firms, CBRE Philippines is the most awarded in the IPA, with two international awards garnered in 2013: World’s Best Lettings Agency and World’s Best Property Consultancy web site. It is also the sole Philippine company, in the history of the awards, to have won in the international level of competitions for two consecutive years.

“We are proud to be recognized once more as one of the best real-estate companies,”

explained Rick Santos, CBRE Philippines chairman, founder and CEO. “We have been in the industry for more than 20 years and have centered our business around people, platform and performance. We have always placed quality of service at the forefront, and our employees ensure that we provide our clients with only the best experience possible. These awards are testament to CBRE Philippines’s long-term dedication and belief in the Philippine real-estate market as a destination for international investors and outsourcing companies.”

CBRE Philippines has been instrumental in bringing in and servicing the largest institutional investors to the country, such as HSBC, Accenture, Wells Fargo and Bank of America, while working closely with the country’s established developers, such as SM, Ayala Land, Megaworld and Century Properties.

The APPA is part of the long-established IPA. Judging is carried out through a process involving a panel of over 70 experts covering every aspect of the property industry.

The IPA is the world’s largest and richest

property competition with 98 countries participating. The awards are open to residential and commercial property professionals and celebrate the highest levels of achievement by companies operating in all sectors of the property and real-estate industry.

World’s Best Awards is given out to the most exceptional estate agencies, lettings agencies and property consultancies, as well as the best industry web sites and marketing campaigns. Judging is chaired by three active members of the House of Lords in UK Parliament—Lord Caithness, Lord Best and Lord Courtown. Rizal Raoul Reyes

PROPERTY

E1

H

Conclusion

OWEVER deceptive the schemes may be, the head of direct sellers in the country said there are clear-cut ways to distinguish legitimate direct-selling companies from pyramiding firms; and one of the central rules involves the payment of a sizable registration fee.

“DSAP’s [Direct Sellers Association of the Philippines] definition of registration fee is that the invested amount, whether there is a product or not, as long as the investment is a requirement to participate in the business, the entire amount is considered the registration fee,” Joey Sarmiento, head of DSAP, said partly in Filipino.

Sarmiento explained that some shady firms ask for hefty up-front

PESO EXCHANGE RATES n US 44.4550

investment to sell products, say P10,000, but assures the participant that he or she will receive P8,000 worth of products.

No matter the worth of the products, Sarmiento said, as long as there is a requirement to pay a substantial fee in order to participate, the operation is already doubtful.

“The objective of legitimate companies is to sell products so the fee should be small, around P200 only, to avail themselves of a catalogue of the products. You encourage people to sign up so they can sell the products so the barrier to entry should be low. You make it easy for them to sign up,” Sarmiento said.

The DSAP head said the costly participation fee is usually used to fund the recruitment bonus to existing members.

C  A

A LAWSUIT, filed on behalf of Flights Beer Bar near Los Angeles International Airport in California, says Manny Pacquiao, seen here addressing his fans—with Ilocos Sur Gov. Luis “Chavit” Singson in the background—upon his return from the US last week, and his promoter’s actions were “nothing but a cash-grab.” AP

THAI GOVT TO HOLD REFERENDUM ON NEW CONSTITUTION

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ANGKOK—Thailand’s government agreed on Tuesday to hold a public referendum on the newly drafted constitution, the prime minister and junta leader said, indicating that the decision could delay a general election.

The move to amend the interim charter to allow the referendum comes after calls by several sides, including the charter’s drafters, for the public to be able to vote on whether they approve of the constitution.

The military abolished an earlier constitution after it took over power S “N C,” A

FRAUD OF THE CENTURY?

L

AS VEGAS—Boxing fans across the country and their lawyers are calling the hyped-up fight between Manny Pacquiao and Floyd Mayweather Jr. a fraud and want their money back, and then some.

At least 32 class-action lawsuits allege Pacquiao should have disclosed a shoulder injury to boxing fans before the fight, which Mayweather won in a unanimous decision after 12 lackluster rounds that most fans thought didn’t live up to the hype.

Fight of the century? More like fraud of the century, the lawsuits contend.

“The fight was not great, not entertaining, not electrifying. It was boring, slow and lackluster,” according to a lawsuit filed in Texas alleging racketeering, a claim usually reserved

for organized crime.

A lawsuit, filed on behalf of Flights Beer Bar near Los Angeles International Airport in California, said Pacquiao and his promoter’s actions were, “nothing but a cash-grab.” The bar paid $2,600 to broadcast the fight.

As for that grabbed cash, the fighters are each expected to earn more than $100 million, Mayweather more than Pacquiao, and HBO and Showtime broke records raking in more than $400 million from 4.4 million paying to watch the pay-per-view broadcast.

Those 4.4 million paid up to $100 each to watch the fight, and the lawsuits are seeking their money back.

It isn’t as easy as showing a receipt and demanding a refund, though. A S “F,” A

n JAPAN 0.3705 n UK 69.5943 n HK 5.7359 n CHINA 7.1652 n SINGAPORE 33.4651 n AUSTRALIA 35.6096 n EU 50.3008 n SAUDI ARABIA 11.8547 Source: BSP (19 May 2015)

A2

BMReports BusinessMirror

Wednesday, May 20, 2015

news@businessmirror.com.ph

The evolution of pyramiding and the ‘unwitting’ partners Continued from A1

Moreover, Sarmiento said another red flag is when a company is asking a potential participant to invest in “multiple business units,” that is, offers multiple sign-ups to a single participant in order to hasten the company’s earnings.

Trade Undersecretary for Consumer Protection Victorio A. Dimagiba said gray areas—such as assessing if a package of products is worth the price sold to a participant—are still debatable.

He reiterated that the Securities and Exchange Commission (SEC) is the agency to assess the operations of the company.

Dimagiba said based on the records of the Consumer Protection Office, the Department of Trade and Industry (DTI) has not shut down any pyramiding companies since 2013, and complaints on dubious pyramiding firms are few and far in between.

“We get queries if they have a place of business, whether they are registered, but there were no formal complaint against this company or that,” Dimagiba said, adding, “consumers have grown wise.”

Though many victims have sought relief from the DTI Consumer Protection Act and the Securities and Regulation Code, direct sellers in the country are seeking a blunter instrument to fight pyramid-sales scheme operators.

Legislation

DSAP, an organization of 31 members, said the key to better enforcement is to make their advocacy a permanent one—through legislation.

DSAP is crafting an anti-pyramid-

ing scheme bill to put more teeth to existing regulations and curb the proliferation of pyramiding scams in the country.

Sarmiento said in a recent interview with the BusinessMirror that they plan to find a sponsor in both the House of Representatives and the Senate for the bill. The draft of the legislation should be finished by the third quarter of 2015.

“This should really put some teeth into our advocacy,” Sarmiento said.

The bill will be based on the “eight-point test” it has developed with the DTI in detecting pyramiding schemes. “This is the association’s project this year. We’re working on the provisions,” Sarmiento said.

and the kinds of practices that constitutes a pyramid sales scheme.

Moreover, the AO puts forward two procedures for seeking redress: one for consumers, and another for DTIinitiated complaints and corporations.

For consumers, the Consumer Act provides the procedures. For the DTI and corporation, Executive Order 913, “Strengthening the RuleMaking and Adjudicatory Powers of the Minister of Trade and Industry in Order to Further Protect Consumers” exists.

The Consumer Act grants an administrative penalty of not less than P500 and not more than P300,000, while the executive order mandates fines at between P500 and P150,000.

$179-billion business

Pending bills in the Senate

He quoted the World Federation of Direct Selling Associations in his estimate that the global direct selling industry is worth $ 179 billion as of 2013, and enjoyed an 8.1-percent growth that year.

For the local industry, it is estimated at $1.2 billion, with the number of direct sellers at 2 million.

Sarmiento said 2014 data has not been computed yet.

Growth has been steady for legitimate direct sellers, Sarmiento said, even with the number of unscrupulous pyramid schemes in operation.

Currently, DTI Administrative Order (AO) 8-2002 covers the prohibition of “chain distribution plans or pyramid sales schemes” in the sale of consumer products.

Consumer Act

The order builds upon the Consumer Act’s definition of the “chain distribution plans or pyramid sales schemes.” It expounds on the scope

In the Senate, Sen. Jose Pimentel “Jinggoy” Estrada Jr., and Sen. Cynthia Villar have each filed their respective anti-pyramiding bills.

Estrada’s version, titled “AntiPyramid Promotional Scheme Act of 2013,” simply prohibits a pyramid promotional scheme, and puts in a reasonable return policy in case a participant wishes to withdraw from the business operations, in line with the provisions of the Consumer Act. Villar’s bill, on the other hand, aims to introduce amendments to the Consumer Act to include additional coverage of illegal business schemes, and expanding the definition of chain distribution plans and pyramid sales schemes.

Article 4(k) of the Consumer Act defines pyramiding sales scheme as a sales device whereby a person, on the condition that he makes an investment, is granted the manufacturer or his representative a right to recruit

for profit one or more additional persons who will also be granted such right to recruit on condition of making a similar investment.

The definition adds that the profits using such a place are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit The bill widens the scope of the definition by inserting phrases to specify the means by which participants make an investment [“by purchase of goods or paying a fee”] and inserting the act of selling products and services (in addition to the right to recruitment), in exchange for making the investment.

Villar’s bill includes the sale of products and services as part of the recruitment process of pyramid sales schemes because selling commodities is used to mask the member recruitment by illegal pyramiding businesses today.

Other features of the bill are added definitions to Article 4—such as technology fraud, telemarketing fraud and Ponzi schemes—to cover other types of dubious investment schemes.

Senate Bill 2341, likewise, increases the fines from P500 to P300,000 range to P100,000 to P500,000.

“We have to continue to be vigilant, both consumers and the government. In Asia we’re one of the few without an Anti-Pyramiding Act,” Sarmiento said.

Bill pending at the House of Representatives

To curb the growing threat of pyramid schemes as a way of defrauding individuals and groups of their hard-earned money, a bill increasing the penalties of the il-

legal activities has been filed at the House of Representatives.

House Bill 1415, authored by Nacionalista Party Rep. Harlin Abayon of Northern Samar, seeks to amend certain provisions of the Republic Act 7394, or the Consumer Act of the Philippines, defining for the purpose the crime of pseudo-investments and providing penalties.

The bill is now under deliberations at the House Committee on Trade and Industry, headed by Nacionalista Party Rep. Mark Villar of Las Piñas City.

The current Consumer Act of the Philippines only includes the definition of “Chain distribution plans” or “pyramid sales schemes,” which means “sales devices whereby a person, upon condition that he makes an investment, is granted by the manufacturer or his representative a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon condition of making similar investments: Provided, That the profits of the person employing such a plan are derived primarily from the recruitment of other persons into the plan rather than from the sale of consumer products, services and credit and the limitation on the number of participants does not change the nature of the plan.”

But under the proposed measure, the pseudo-investments will now refer to but are not limited to pyramid sales scheme, Ponzi schemes, telemarketing fraud and “technology fraud.”

Abayon said the “pyramid sales scheme” or “chain distribution plan,” will now refer to sales devices whereby a person upon condition that he makes an investment by way of pur-

New Constitution. . . from an elected government in a May 2014 coup, and the government operates under a temporary charter. The junta later picked the drafters and a 250-member National Reform Council to help write a new constitution.

Meanwhile,Thailand’s former Prime Minister Yingluck Shinawatra entered a plea of not guilty on Tuesday at the start of a trial that could see her jailed for a decade, which critics say is part

Fraud. . .

chasing good or paying fee.

She added that the Ponzi scheme is defined as a business structure similar to the pyramid scheme operated on by a person or group, natural or juridical where there is no true product or service being offered in exchange for the investment and where the money tendered by new investors are paid to earlier investors.

Telemarketing fraud, meanwhile, refers to a scheme where high-pressure tactics are made over the phone with the intent to make the investor buy into fraudulent or non-existent investment offering, she added.

The lawmaker said technology fraud refers to a scheme wherein investors are lulled into making purchases or investments of nonexistent products through Internet home or cyber shopping.

Moreover, the bill provides that any person who shall violate the act shall, upon conviction, be subject to a fine not less than P100,000 but not more than P500,000 and/or imprisonment of not less than two years but not more than four years, upon discretion of the court.

In filing the bill, Abayon said the present provision of the Consumer Act of the Philippines was inadequate to protect Filipino consumers, saying that a revision should be made in order to directly address the issue.

In the Philippines, she said, the multinational corporations and local companies have engaged in this scheme in the form of multilevel marketing. The measure, which was refiled by Abayon, was previously filed by Sen. Manny Villar but failed to pass during the 15th Congress.

With Jovee dela Cruz

Continued from A1

of a politically motivated campaign against her family. Supporters chanted “Yingluck! Yingluck!”as the ex-premier entered the Supreme Court in Bangkok to be formally read the charges against her of dereliction of duty in overseeing a rice-subsidy scheme that lost billions of dollars.

“I am confident in my innocence,” Yingluck told reporters. “I hope the court will grant me justice, and that

everything will go according to due process under the law.”

Yingluck posted bail set at $900,000, or 30 million baht, and was ordered by the court not to travel outside Thailand without permission during her trial.

The next hearing was set for July 21.

Yingluck was ousted from her post as prime minister by a court decision that came two weeks before the military staged a coup last May. AP

did not return multiple phone messages.

Exhibit A for most of the lawsuits is a Nevada Athletic Commission medical questionnaire that Pacquiao signed days before the fight. When asked if he had any injuries including to his shoulder he replied “no.”

In fact, his shoulder was injured enough to warrant surgery shortly after the fight. In a twist reserved for whodone-its, Pacquiao revealed for the first time in a post-fight news conference that he had torn his rotator cuff weeks before. The Nevada Athletic Commission denied him a pain reliever mere hours before the fight when regulators first learned of the injury.

Conspiracy theories abound as to how many people knew about the

injury and when, including claims in a few of the lawsuits that Mayweather had a spy in Pacquiao’s camp and the boxer targeted Pacquiao’s right shoulder during the fight.

Experts in resolving legal disputes doubt disgruntled boxing fans will be able to claim victory.

“They’d have more lawsuits if they didn’t hold the fight,” said Maureen Weston, director of Pepperdine University’s entertainment, media and sports dispute resolution project.

If a fight is what fans were paying for, the fighters unquestionably delivered, she said. Just because people didn’t like the show doesn’t mean they get their money back, she said. AP

Continued from A1

federal panel of judges will likely first need to decide if the cases from multiple states and Puerto Rico should be consolidated into one case. From there, a judge would have to decide whether to certify them as class actions or not.

What’s sought in each is the same: a jury trial and at least $5 million in damages, the threshold for federal class actions.

But the defendants differ. All include Pacquiao and his promotions team but some add Mayweather and his representatives along with HBO, Showtime and cable companies.

Representatives for Pacquiao and Top Rank Promotions, HBO and Showtime had no comment to offer on the lawsuits and Mayweather Promotions

China malware. . . along those lines. We suspect that; that’s why they are so interested in the Southeast Asian region,” he told the BusinessMirror.

He, likewise, raised a concern for protection among the industries, particularly the media and entertainment sector, considering that targeted attacks in 2014 saw a significant uptake on members of the press who report on regional affairs and Chinese government.

“We also see a lot of attacks against defense on industrial base. We see attacks against the financial sector, oil and gas explorations. They generally possess sensitive information that,

Continued from A8

if in the hands of the adversary, could provide them a competitive advantage,” he added.

Considering that APT 30’s attack tools, tactics and procedures (TTPs) have remained consistent since inception—a rare finding as most APT actors adjust their TTPs regularly to evade detection—he pushed for an immediate concerted efforts to its solution.

“There’s a number of measures and countermeasures an organization can take,” Issa said. “But I think awareness and education are the keys, and then understanding from a defense perspective. Companies, like FireEye, are well positioned to do that,” he stressed.

FireEye has invented a purpose-built, virtual machine-based security platform that provides real-time threat protection to enterprises and governments worldwide against the next generation of cyberattacks.

These highly sophisticated cyberattacks easily circumvent traditional signature-based defenses, such as next-generation firewalls, IPS, anti-virus and gateways.

From July to December 2014, FireEye products detected malware used by APT groups and other actors targeting the networks of 29 percent and 27 percent of its customers in Southeast Asia and across the globe, respectively.

www.businessmirror.com.ph

BusinessMirror Special Feature

Wednesday, May 20, 2015 A3

Economy

A4 Wednesday, May 20, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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Korea, Taiwan help lift Q1 2015 visitor arrivals

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By Ma. Stella F. Arnaldo | Special to the BusinessMirror

ISIT Philippines Year 2015 (VPY 2015) appears off to a good start, as some recovery in the South Korean market helped boost total tourist arrivals to 1.4 million in the first quarter of the year.

Data from the Department of Tourism (DOT) showed total visitor arrivals were up 6.3 percent, from the 1.31 million recorded in the same period in 2014. The growth was also double the registered growth in January to March 2013, which was at 3.01 percent.

After months of sluggishness, visitors from South Korea grew by 20.4 percent to 361,480 from January to March 2013; followed by a 7.32-percent rise to 214,057 visitors from the United States; and an 8.7- percent increase to 130,374 visitors from Japan.

Unfortunately, continuing political and territorial differences between the Manila and Beijing governments, as well a crackdown on corruption in mainland China, have kept Chinese travelers at bay.

For the first quarter of 2015, Chinese tourists plunged by 32 percent to 93,043.

The Taiwan market, however, has also rebounded, growing by 18.12 percent to 41,713 arrivals in the first quarter of the year, with Malaysia also giving visitor arrivals a lift by 17.41 percent to 37,336.

In a text message to the BusinessMiarror, DOT Spokesman and Undersecretary for Tourism Development Benito Bengzon Jr. said: “The primary goal of the DOT has always been the overall production.

Toward this end, we have strived to achieve an optimum mix of source markets so we are not totally dependent on just a few. While we continue to step up our marketing and promotions in China, we are also tapping new geographic mar-

kets and developing new activities to expand our market base to include the high-yield tourists.”

Under the Aquino administration’s National Tourism Development Plan (NTDP) for 2011-2016, the DOT is supposed to attract more travelers from so-called high growth markets, like South Korea, the US, Japan, China, Asean, Australia, Taiwan, Hong Kong, Canada, the United Kingdom, Germany, India, Russia and Scandinavia.

In particular, the DOT’s target for China this year was 760,726 visitors.

Reflecting the higher visitor arrivals for the first three months of the year, tourism receipts, likewise, increased by 3.23 percent to $1.33 billion (P58.96 billion), from $1.28 billion (P57.68 billion) in 2013.

Travelers from Asia accounted for the largest bulk of arrivals in the Philippines, at 57.58 percent, or 801,145 out of the total 1.39 million tourists.

The Americas (Canada, Mexico, the US and South America) contributed 18.95 percent, or 263,755, to the total, while Europe (including

PHL to miss 2015 growth goal—think tank PIDS states

By Cai U. Ordinario

T

he Philippine economy will likely miss its growth target this year due to lower government revenues resulting from cheaper oil and the tax exemption given to workers, according to state-owned think tank Philippine Institute for Development Studies (PIDS).

The PIDS estimates that the economy will post a growth of 6.8 percent on the back of household and government consumption this year. However, this is below the government’s target of 7 percent to 8 percent this year. “ T he GDP grow th forecast is 6.8 percent, and the biggest drivers of growth will be private consumption and government consumption. The risks to the outlook are [the] decline in government revenue,” PIDS Senior Fellow Adoracion Navarro said in a forum on Tuesday.

“We expect a decline in revenues from oil importation, a decline in the Bureau of Customs revenues and also the general decline in BIR [Bureau of Internal Revenue] revenues because of the tax exemption on de minimis benefits and productivity bonuses of workers, and the higher exemption tax ceiling on the 13th-month pay. This has serious implications on government spending for infrastructure and social services,” she explained.

Navarro also said other risks include low export receipts due to the slowdown in the growth that will be posted by the country’s trading partners and the competitiveness and responsiveness of Asean economies in global value chains.

She added that the country has an overstretched infrastructure sector, which suffers from tight power supply, as well as port, airport and land-transportation congestion.

However, Navarro said the Philippine economy can still post a sustained growth of 7 percent beyond 2015. But, she said, the government must undertake various policy responses to turn this into reality.

In a statement, Regina Capital said the threat of a disruptive El Niño weather pattern could raise food costs later this year. Further, an expected rebound in oil prices may force the central bank to raise

rates, already at 4 percent to contain inflation.

Regina Capital also said government spending could fall below budget anew if agencies continue to get tripped up in red tape, or lack of capabilities to execute projects.

Last month the government said spending in 2014 was 13.3 percent short of its target because of understaffed agencies.

But with the presidential elections next year, the government is likely to keep its promise of ramping up government spending, according to Bill Diviney, an economist at Barclays, as infrastructure improvements and job creation are popular with voters.

After its policy meeting last week, the central bank also cited expectations of increased government spending as one of the reasons for holding interest rates steady. With port and road congestion clearing up in Manila from earlier this year, “you do get the sense that the government is putting in the effort,” Diviney said.

Navarro said other policy responses include ensuring the reliability of power supply and transportation infrastructure, as well as facilitating the transmission of resources from the financial to the real sector.

She added that both the private and public sectors must take advantage of the low oil-price regime.

This can open doors for company expansion in the private sector and controversial moves, such as higher taxes, for the public sector.

The National Economic and Development Authority (Neda) also earlier urged businesses to capitalize on the prevailing cheaper oil and expand their operations.

The World Bank, the Asian Development Bank and Socioeconomic Planning Secretary Arsenio M. Balisacan urged the government to increase excise taxes, especially at this time when oil prices are very low.

Apart from these, Navarro said the government must also monitor regional and global developments, such as the foundation of new multilateral banks. She cited China’s efforts in creating facilities, like the Asian Infrastructure Investment Bank and the so-called Silk Road, to finance development initiatives in the region.

In line with these developments in the region and globally, the Neda

Russia, CIS, and Mediterranean countries) represented 11.6 percent, or 161,093.

Under the NTDP, the DOT is targeting to attract 8.2 million foreign visitors this year, and 10 million by 2016, when President Aquino steps down from office.

For the past four years, however, the DOT has been missing its visitor arrivals targets due to a combination of factors, such as political skirmishes in the South and natural calamities, as well as diplomatic differences with Hong

Kong, Taiwan and China. As such, it has focused, instead, on meeting its tourism receipts targets for the remaining years of the Aquino administration.

The DOT hopes to generate visitor receipts amounting to P199 billion in 2015, and P242 billion in 2016. In an interview, Tourism Secretary Ramon R. Jimenez Jr. pointed out, “we already exceeded this year’s target last year.” Visitor receipts reached P215 billion in 2014.

But he was confident that there would be more improvement in visitor arrivals this year, as the Philippines hosts a number of major international events for VPY 2015.

These include the recently concluded papal visit, Madrid Fusión Manila and First MTV Music Evolution; the yearlong Asia-Pacific Economic Cooperation (Apec) ministerial and senior officials meetings, which will culminate in the Leaders Summit in November; as well as recent festivals, like the Ati-Atihan, the Philippine Hot Air Balloon Fiesta, the Philippine International Pyromusical Competition; and forthcoming sporting events, like the Iron Man and Xterra Triathlons, CWC International Wakeboarding Competition and the Mount Apo Boulder Face Challenge.

Services liberalization to boost growth of SMEs in Asia Pacific

By Catherine N. Pillas

A

s i a- Pa c i f i c m a r k e t s need to further liberalize their services sectors to smaller businesses to participate in cross-border trade, private and public stakeholders said during a recently concluded informal Asia-Pacific Economic Cooperation (Apec) Senior Official ’s Meeting. “ S e r v ice s s e c tor s a re now at the center of a major business transformation in Apec, contributing more intensively to the value chains in manufacturing and agriculture and to the way business trades and invests,” said Doris Magsaysay Ho, president and CEO of the Magsaysay Group of Companies and 2015 chairman of the Apec Business Advisory Council.

“More open trade and investment in services help smaller companies, professionals and service providers who have focused more on domestic markets,” Ho added.

Three-quarters of small and medium enterprises (SMEs) are involved in services and are heavily engaged in the global production and supply chains, as these sectors are less capital intensive and require less physical infrastructure

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said the Philippines will lead the preparation of analytical framework papers on structural reform for inclusive growth and the role of structural reform on services to help shape discussions in the forthcoming Structural Reform Ministerial Meeting to be held in Cebu City in September.

Five themes were agreed upon by the Economic Committee.

These are Structural Reform for Inclusive Growth; Structural Reform and Innovation; Structural Reform and Services; Tools for Structural Reform; and New Directions for Structural Reform in the Asia Pacific Economic Cooperation (Apec).

“The theme on inclusive growth is very much aligned with our national priority, as it is the country’s overarching goal based on the Updated Philippine Development Plan

2011-2016. Services, on the other hand, is one of the country’s key initiatives as we advance the Apec Services Cooperation Framework during this hosting year,” Neda Assistant Director General Rosemarie G. Edillon said.

Neda highlighted the need for governments and the private sector to do things differently to make growth inclusive as a way to escape the so-called middle-income trap.

The term is used to refer to a situation where an economy is no longer considered in the low-income category but is taking too long to graduate to high-income status.

The Philippines is joined by Peru and Japan in preparing the paper on Structural Reform for Inclusive Growth. The country is also getting help from Australia and Peru on the paper for the Structural Reform and Services.

than manufacturing activities.

Because their production scale is smaller, such firms can further develop expertise in one specific task within a value chain Foreign Undersecretary Laura Q. del Rosario, 2015 chairman of the Apec Senior Official’s Meeting, echoed the sentiment, stressing that efforts to improve trade and investment, particularly in services, will pave the way for inclusive growth.

To this end, the creation of a new Apec Services Cooperation Fra mework , a n Apec Vir t u a l Knowledge Center and structural reforms will be discussed during the Apec Meeting of Ministers Responsible for Trade next week, according to a statement released to the media.

Specifically, sectoral measures, such as tax reforms aimed at the tourism sectors and entrepreneurial community, as well as delivering the lowering of tariffs on environmental goods, will be taken up.

In the Philippines, 99 percent of registered enterprises are SMEs. In Apec economies, SMEs make up 97 percent of all businesses, and yet their share in exports in their respective economies is still relatively low.

PAL limits shipment, carrying of computer, mobile-phone batteries

By Recto Mercene

F

lag carrier Philippine Airlines (PAL) has moved to regulate the shipment of lithiumion batteries for being fire hazards.

The flag carrier is now part of the growing number of international carriers which have imposed a ban on battery shipments.

“Safety is the cornerstone of our operations. We mitigate risks as we assure our passengers of our commitment to safety,” PAL President and COO Jaime J. Bautista said.

Lithium-ion and lithium-metal batteries packed with or contained in equipment are exempted, provided the regulatory requirements

on packaging and labeling are complied with.

Lithium-ion batteries (rechargeable), used in consumer electronics, are generally found in mobile phones and laptop computers, while lithiummetal batteries (nonrechargeable) are generally used to power devices such as watches, calculators and temperature data loggers.

Passengers are also advised to hand carry their equipment powered by lithium batteries together with their spare batteries. Carriage of spare lithium batteries will be limited.

PAL reminds the public that recalled or damaged batteries are not allowed as carry-on, checked baggage or cargo.

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Wednesday, May 20, 2015 A5

San Miguel, MPIC submit bids for Calax

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By Lorenz S. Marasigan

he chief of the public works department couldn’t be any happier with the turnout of Tuesday’s rebidding for the P55.52-billion Cavite-Laguna Expressway (Calax) deal, after two parties—prominent names in the business community, for that matter—submitted their proposals for the much-coveted and controversial contract.

Of the four parties that initially expressed their interest in the project, only San Miguel Corp. and Metro Pacific Investments Corp. (MPIC) submitted their offers to the Department of Public Works and Highways on Tuesday.

The technical and financial proposals of the two parties, however, were not opened that day. The technical bids are scheduled for opening on Friday, while the financial proposals will be bared on Tuesday next week.

“We are just happy to have two bidders for the rebidding,” the Cabinet official said in a text message.

He said he hopes to issue the notice of award on July 7, then sign the contract three weeks after. The notice to proceed should then be issued by end-July.

The deal’s rebidding is already almost a year in the making.

To recall, the results of the initial auction for the deal was declared void by President Aquino, after his uncle’s firm sought for a reconsideration of its multibillion-peso bid.

It took the government four months to decide on the petition of San Miguel unit Optimal Infrastructure Development Inc., which sought to overthrow the offer of Team Orion of Ayala Corp. and Aboitiz Equity Ventures Inc. Team Orion emerged as the first auction’s top bidder, with a premium bid of P11.33 billion. San Miguel’s disqualified bid, on the other hand, carried a P20.1-billion premium. Hence, the

Neda Board OKs new infra projects worth P61.9 billion

By Butch Fernandez

T

he National Economic and Development Authority (Neda) Board, in another marathon meeting chaired

by President Aquino, approved on Tuesday a fresh batch of multibillion-peso infrastructure projects that the Palace said was aimed at boosting eeconomic development in key growth areas. coloma The closed-door deliberations in Malacañang was still ongoing as of press time, but Palace Communications Secretary Herminio B. Coloma Jr. reported that at least five projects, estimated to cost over P61.9 billion, were already approved by the Board as of 4 p.m.

These include the P6.9-billion Road Improvement and Institutional Development (RIID) Project of the Department of Public Works and Highways (DPWH); the P28.9-billion National Roads Improvement and Management Program, Phase II, also to be undertaken by the DPWH; the P2.6-billion Agno River Irrigation System Extension Project under the National Irrigation Administration (NIA); the P13.4-billion BalogBalog Multipurpose Project, also under the NIA; and the P10.1-billion Light Rail Transit (LRT2) West Extension Project, under the Department of Transportation and Communications.

According to Coloma, the RIID Project involves the upgrading of 339 kilometers of 10 major national roads in the provinces of Benguet, La Union, Leyte, Iloilo, Negros Oriental, Agusan del Norte, Bukidnon and Cotabato.

Coloma added that the National Roads Improvement and Management Program Phase II covers the restructuring and reallocation of $60 million of the $232-million World Bank loan to assist local government units in expediting the rehabilitation of Supertyphoon Yolanda-devastated areas.

The extension of the existing LRT Line 2 would cover over 3 kilometers from the Recto station extending westward to the Pier 4 area, including the turnback track with three proposed additional stations: Tutuban, Divisoria and Pier 4.

rebidding had to require bidders to submit an offer with a minimum premium offer of P20.1 billion.

Ayala Corp. Managing Director John Eric T. Francia said his group only hopes that the project will be a success despite all the issues that hounded it last year.

Business groups earlier hit the government for its decision to place the deal

under a rebidding, instead of considering the results of the “above board” initial tender for the contract.

“I hope that this will pave the way for this important road to be built soonest,” he told the BusinessMirror.

The project is a 47-kilometer thoroughfare that will link the ManilaCavite Toll Expressway and the South

Luzon Expressway aimed at enhancing trade and socioeconomic activities in the region.

The private partner will take on the financing, design, construction, and operation and maintenance of the entire four-lane toll road.

The project will also include the construction of centralized toll plazas,

a toll-collection system, viaducts and bridges. The road should be operational by 2019, based on an indicative timeline.

The government has awarded nine contracts since the infrastructure program’s inception in 2010. It aims to sign at least 15 contracts by the time President Aquino steps down from office in 2016.

A6 Wednesday, May 20, 2015

Opinion BusinessMirror

editorial

A frame of reference for our patriotism

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he last three years have seen our dispute with China over islands in the West Philippine Sea escalate to unprecedented heights. China has been building up “a wall of sand” around shoals in the Mischief Reef, connecting these shoals. Further, it has now succeeded in creating a 3-kilometer-long airstrip from which Chinese aircraft can fly to the airspace of the Philippines, Vietnam and other Southeast Asian countries. This is an obvious threat to our national security.

We are under challenge not just in the Mischief Reef, but in the Bajo de Masinloc and the Kalayaan group, as well, islets or reefs that are within the Philippine 200-mile exclusive economic zone, as defined by the United Nations Convention on the Law of the Sea (Unclos).

We have lodged a memorial over Chinese actions at the International Court of Justice, validating our claims over parts of the West Philippine Sea. We are confident that we will win our case.

The United States has taken an interest in the dispute not only because it undermines peace and stability in the Southeast Asian region, but because it poses a threat to freedom of navigation in this part of the world. It is calling on China to refrain from creating tensions in this region through its efforts to change the facts on the ground. But China has taken a hard-line position, asserting what it calls its “unshakable sovereign right” over Chinese territory.

At this point, matters do not look reassuring.

The Filipino people, we dare say, are ready to respond to Chinese bullying. But we need concreteness in our thoughts about Philippine territory and Philippine sovereignty.

For starters, where exactly is the Mischief Reef, the Bajo de Masinloc, the Kalayaan Group and, for that matter, where are the Spratlys and the Scarborough Shoal? What islands in the vast West Philippine Sea are enclosed in the 200-mile exclusive economic zone of the Philippines, as defined by the Unclos?

The Encyclopaedia Britannica describes the vast West Philippine Sea as consisting of shoals, reefs and rocks protruding above water during high tides.

The places we are talking about are some of these rocks, reefs and shoals.

We call upon the national authorities concerned to print maps of the Philippines explicitly showing the “islands” in the West Philippine Sea, including, specifically, those that belong to us, so that we, and the rest of the Filipino people, will know exactly what we are talking about when we refer to our territory and sovereignty. These maps must also show the 200-mile exclusive economic zone and the islands enclosed by it. These maps must be printed and distributed to the population as soon as possible.

Who are the authorities concerned? The National Historical Commission?

The Department of Education? The Department of National Defense? Whoever they are, they must do the job now.

It is time we are provided with a clear frame of reference for our patriotism.

Our government owes it to us.

Social Security benefits for Kentex fire victims Susie G. Bugante

All About Social Security

T

he tragic Kentex slipper-factory fire in Valenzuela City, which snuffed out some 72 lives as of the latest count, was clearly a result of corporate greed and is a painful eye-opener to many. It is said to be the third-worst fire incident in Philippine history—the worst being the Ozone Disco club fire in 1996 that killed 162 people, followed by the Manor hotel fire in 2001 that claimed 75 lives, both in Quezon City.

With so many workers who perished in the fire, it was but natural to find out if there was any form of insurance for them. Were they reported to the Social Security System (SSS) for coverage? What about Employees’ Compensation (EC) benefits, since they died or were injured while working in the factory?

These are some of the questions that cropped up in the wake of the unfortunate incident.

Based on the initial inquiry into the records of Kentex Manufacturing Corp. and its manpower agency CJC Manpower Services, their compliance to SSS rules appears spotty.

Of the regular Kentex employees who died in the fire, a few had valid

contributions, while most didn’t have updated contributions. CJC Manpower Services, on the other hand, had about a dozen employees who were reported to the SSS for coverage, while some 42 others had no records of being reported for coverage.

Given these miserable circumstances, what recourse do the families and beneficiaries of the deceased members have? Will they still be able to claim some benefits?

Definitely, yes! For as long as it can be established that there was an employer-employee relationship between workers who died and the company that they worked for, even if they were not reported for coverage to the SSS by their employers or

that their contributions are delayed, their beneficiaries are entitled to receive social security and EC death and funeral benefits. The same is true for workers who were merely injured or got sick. They, too, could file for sickness or disability benefits even if their employers did not remit their contributions to the SSS. They will still be entitled to the benefits.

Their employers will be held liable for violating the SSS law, and will be required to pay the unremitted contributions plus penalties. In instances wherein the employee’s shares of contributions were deducted but were not remitted to the SSS, the employer will be criminally liable for estafa, and that means a jail term.

The SSS, in an advisory to the public, said it will set up a Help Desk at the Valenzuela City Hall today, May 20, to assist the families of the victims of fire that ravaged a factory in the city last Wednesday. The SSS Help Desk will be at the audiovisual room and will be open from 8 a.m. to 5 p.m. Beneficiaries are advised to bring pertinent documents, such as payslips or employment contracts of the deceased members and their (the beneficiaries’) valid IDs, when filing their SSS claims. For employees who were injured from the accident, they should present their medical certificates.

China needs a grown-up central bank William Pesek

BLOOMBERG VIEW

Z

hou Xiaochuan is governor of the People’s Bank of China (PBOC). But among some financial types, he’s earning another, less enviable title: the killer of weekends.

On May 10 Zhou announced a surprise interest-rate cut, forcing anyone with a stake in the Chinese economy to put a premature end to what had likely otherwise been a day off. Even worse, the move leaked hours earlier on social media, adding to what Deutsche Bank calls an unnecessary “atmosphere of alarm” in the global economy. It was just the latest example of the PBOC’s penchant for making surprise moves on Friday, Saturday or Sunday evenings—or, in one instance in 2010, on Christmas Day—with zero warning and little explanation.

All this raises a troubling question: Is China’s central bank up for the responsibility of helping steer the world’s second-biggest economy?

The available evidence suggests the answer is no.

There are two main problems with the PBOC’s erratic behavior. First, it erodes the effectiveness of Zhou’s policies. On May 11, the first trading

day after the PBOC said it was trimming its one-year lending rate by 25 basis points to 5.1 percent, financial markets gyrated. After scouring for details from an array of media, traders simply had no idea what Zhou was trying to accomplish. Had the PBOC provided deeper insight into where it wanted to guide borrowing costs, and why, financial markets might have worked in tandem.

“The resulting confusion and asymmetry in information flows are not in PBOC’s interest,” Angela Beibei Bao, an analyst at New York research firm Rhodium Group, told Bloomberg News.

Second, Beijing’s impetuousness impairs any hope it has of playing a leadership role in the global financial system. No serious observer expects the PBOC to mimic the Federal Reserve or European Central Bank. But, as China’s clout in the international economy rises, it has a responsibility to adopt a decision-making style that

avoids spooking markets.

Take China’s push to transform the yuan into one of the world’s five main reserve currencies. Zhou has been lobbying the International Monetary Fund (IMF) to add the yuan to its special drawing rights system along with the dollar, euro, yen and British pound. That goal is sensible given Beijing’s status as the biggest holder of currency reserves ($3.7 trillion). But, given the country’s propensity for springing monetary surprises, the IMF is unlikely to grant recognition to China as a “safe haven” from global risks.

It doesn’t help that China has also earned a reputation for lacking financial transparency. The IMF, Standard & Poor’s and McKinsey have gotten accustomed to working around the questionable debt figures regularly issued by the Chinese government.

But hardly anyone feels comfortable estimating the size of China’s shadow-banking industry and gold reserves. (Beijing treats the latter as a state secret.)

Zhou has been making efforts to reform the Chinese system. In 2013 he began publishing data on the bank’s liquidity-management efforts. More recently, the PBOC has issued occasional statements to the public, though they tend to elaborate on the meaning of the bank’s mandate—not what efforts Zhou is organizing to meet it.

There are some concrete steps

Survivors of deceased members, who had been identified and been issued death certificates, may claim funeral grants of P20,000 each from both the social security and EC programs the deaths of the members are deemed work-related. The same is true with the death-benefit claims.

This sad incident that, so far, claimed 72 lives should be a lesson to all, including government regulatory and law-enforcement agencies, and, most especially, to business owners, who should remember that it is always better to be on the good side of the law. Fire-protection and occupational-safety laws were put in place to ensure the protection and safety of lives and property.

Social-protection laws were passed to provide economic safety nets to workers. It is cheaper and, therefore, makes good business sense to abide with these laws than to pay penalties and serve jail terms.

For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.

the PBOC could take to further improve its reputation, beginning with the creation of a reliable system for communicating policy changes. Although it’s not officially a Group of Seven power, it should begin scheduling regular rate-decision dates—and Zhou should consider making public statements on policy shifts—like the world’s other major economies.

It would be better, of course, if the Communist Party gave the PBOC the independence it needs to make difficult policy decisions. Right now, Zhou and his team take instructions from Beijing’s State Council, which has a track record of censoring the media. “As China steadily opens up its economy to the world, external risks are likely to grow,” says Simon GroseHodge, Singapore-based investment strategist at LGT Group. “The PBOC will require a free hand to make the unpopular, but necessary decisions politicians all too often defer or avoid altogether.”

Unfortunately, that’s a nonstarter in President Xi Jinping’s China. The PBOC’s problems with transparency are an unfortunate offshoot of Beijing’s broader obsession with secrecy. So for all the talk of China becoming a mature global power, the country seems destined, in the immediate future, to remain a financial black box—one where investors will still be obliged to constantly check their BlackBerrys on the weekends.

Opinion BusinessMirror

opinion@businessmirror.com.ph

A New York theory for Maryland taxes

Insurance Core Principles Dennis B. Funa

Noah Feldman

BLOOMBERG

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he US Supreme Court was mostly in cleanup mode on Monday, disposing of six cases, four of them unanimously and a fifth almost unanimously. In the sixth case, the court decided that Maryland can’t double tax certain income earned by its residents out-of-state—and that opinion drew one of the strangest 5-4 lineups I’ve ever seen.

The majority in Comptroller v Wynne was written by Justice Samuel Alito, who was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer and Sonia Sotomayor. Justice Ruth Bader Ginsburg wrote a dissent that was joined

by Justices Antonin Scalia and Elena Kagan, while Justice Clarence Thomas dissented separately and joined in a separate concurrence by Scalia. If you’re counting at home, that means three conservatives and two liberals on one side, with two liberals and two conservatives on the other. What, exactly, was going on here?

Start with the rather obscure doctrine under which the case was decided. It’s known as the dormant commerce clause—a phrase that, as Scalia repeatedly pointed out in his dissent, appears nowhere in the Constitution. What the Constitution contains is the commerce clause, which empowers Congress to regulate interstate commerce. The “dormant” commerce clause is based on an extension of the logic of congressional power over commerce between the states. The idea is that, just as Congress may regulate interstate commerce, states may not enact regulations that penalize or discriminate against interstate commerce. This inference from the commerce clause is called dormant because it’s passive or sleeping. Another name for it is the negative commerce clause.

Dormant commerce clause doctrine is extraordinarily complicated, and I’m not going to bore you with it. What you need to know is that, to the court’s majority, the decision to prohibit Maryland from double taxing was straightforward. “Our existing dormant commerce clause cases,” Alito wrote, “all but dictate the result in this case.” The logic of those cases, and of the court, is that states may not discriminate against interstate commerce by giving an advantage to local business over interstate business.

The discrimination in this case, for the majority, came because Maryland is, in effect, taxing income earned by its residents out-of-state at a higher rate than income earned by those same residents in the state.

Most states tax their residents for income earned out-of-state, but those states also give you a tax credit for the tax you paid elsewhere. Maryland doesn’t, at least in part. The majority reasoned that this gives Maryland residents an incentive to do business in state, where their taxes will be lower, rather than out-of-state, where the double taxation will reduce their incentive. The distortion incentives, the court held, amounted to discrimination.

At the level of constitutional philosophy, the majority’s view draws an analogy between the US and an economic union like the European Union. According to this logic, one purpose of the US, from the ratification of the Constitution until the present, is to draw us ever closer into a common economic union. Discriminatory state regulation stands

in the way of economic union. It’s therefore not simply a bad idea, but a constitutional violation.

The fact that the Constitution never mentions the dormant commerce clause is, for Scalia, a profound provocation. In a classically pugnacious opinion, Scalia called the negative commerce clause “a judicial fraud” invented by the courts in contravention of the original meaning of the Constitution. He dismissed the court’s doctrine as “ad hocery.”

And he created two new names for the negative commerce clause, which he capitalized in derision: the “Synthetic Commerce Clause” and the “Imaginary Commerce Clause.”

Scalia nevertheless takes the relatively moderate view that, despite the wrongfulness of commerce clause doctrine, he nevertheless will vote to strike down a tax under the negative commerce clause if it facially discriminates against interstate commerce or if it should be struck down under existing doctrine. Thomas rejects this deviation from the originalist faith, and wrote separately to remind us that he will never strike down a law based on the dormant commerce clause because it has “no basis in the text of the Constitution.”

Yet, this still leaves Ginsburg’s dissent, which was joined by Scalia but also by Kagan, a liberal justice. Ginsburg didn’t repudiate the dormant commerce clause or even division of national unity. But Ginsburg read existing precedent to allow Maryland’s taxation approach. The core of her argument was that, although Maryland was indeed taxing out-of-state income without any offsetting credit, it was reciprocally true that the other states were denying a credit for taxes paid to Maryland. She acknowledged that states ordinarily do provide the credit Maryland denies. But she said that they do so as a matter of tax policy, “not because the Constitution compels the course.”

I can’t say for sure why Ginsburg and Kagan dissented, but here’s unwarranted speculation for you: They’re both native New Yorkers (as is Justice Scalia). New York City (and New York State) has a longterm interest in being able to tax out-of-staters differentially to compensate for services that are used by commuters from New Jersey. I don’t mean that they were voting in naked self-interest. Rather, as New Yorkers, these justices can be expected to understand that there are circumstances where a pure neutrality rule for state taxation makes no sense.

Meanwhile Alito, who might otherwise have been expected to share Scalia’s originalism in this case, is from—wait for it—New Jersey. His chambers were in Newark when he was on the appeals court. The only deviation from what would otherwise be a perfect geographical lineup in this case is Sotomayor, who, according to my crackpot theory, should’ve joined her fellow New Yorkers. But hey, no theory is perfect.

INSURANCE FORUM

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here are 26 Insurance Core Principles adopted by the International Association of Insurance Supervisors (IAIS).

These principles are intended for all supervisors around the world, regardless of the level of development and sophistication of the insurance market. We present to you these principles, together with the guidance statements as prepared by the IAIS. 1. Objectives, powers and responsibilities of the supervisor. The authorities responsible for insurance supervision and the objectives of insurance supervision are clearly defined; 2. The supervisor. The supervisor, in the exercise of its functions and powers: is operationally independent, accountable and transparent; protects confidential information; has appropriate legal protection; has adequate resources; and meets high professional standards; 3. Information exchange and confidentiality requirements. The supervisor exchanges information with other relevant supervisors and authorities subject to confidentiality, purpose and use requirements; 4. Licensing. A legal entity which intends to engage in insurance activities must be licensed before it can operate within a jurisdiction. The requirements and procedures for licensing must be clear, objective and public and be consistently applied; 5. Suitability of persons. The supervisor requires board members, senior management, key persons in control functions and significant owners of an insurer to be and remain suitable to fulfill their respective roles; 6. Changes in control and portfolio transfers. Supervisory approval is required for proposals to acquire significant ownership or an interest in an insurer that results in that person (legal or natural), directly or indirectly, alone or with an associate, exercising control over the insurer. The same applies to portfolio

transfers or mergers of insurers; 7. Corporate governance. The supervisor requires insurers to establish and implement a corporate governance framework which provides for sound and prudent management and oversight of the insurer’s business and adequately recognizes and protects the interest of policyholders; 8. Risk management and internal controls. The supervisor requires an insurer to have, as part of its overall corporate governance framework, effective systems of risk management and internal controls, including effective functions for risk management, compliance, actuarial matters and internal audit; 9. Supervisory review and reporting. The supervisor takes a risk-based approach to supervision that uses both off-site monitoring and on-site inspections to examine the business of each insurer, evaluate its condition, risk profile and conduct, the quality and effectiveness of its corporate governance and its compliance with relevant legislation and supervisory requirements. The supervisor obtains the necessary information to conduct effective supervision of insurers and evaluate the insurance market; 10. Preventive and corrective measures. The supervisor takes preventive and corrective measures that are timely, suitable and necessary to achieve the objectives of insurance supervision; 11. Enforcement. The supervisor enforces corrective action, where needed, imposes sanctions based on clear and objective criteria that are publicly disclosed;

Wednesday, May 20, 2015

12. Winding-up and exit from the market. The legislation defines a range of options for the exit of insurance legal entities from the market. It defines insolvency and established the criteria ad procedure for dealing with insolvency of insurance legal entities. In the event of winding-up proceedings of insurance legal entities, the legal framework gives priority to the protection of policyholders and aims at minimizing disruption to the timely provision of benefits to policyholders; 13. Reinsurance and other forms of risk transfer. The supervisor sets standards for the use of reinsurance and other forms of risk transfer, ensuring that insurers adequately control and transparently report their risk transfer programs. The supervisor takes into account the nature of reinsurance business when supervising reinsurers based in its jurisdiction; 14. Valuation. The supervisor establishes requirements for the valuation of assets and liabilities for solvency purposes; 15. Investment. The supervisor establishes requirements for solvency purposes on the investment activities of insurers in order to address the risks faced by insurers.

16. Enterprise risk management for solvency purposes. The supervisor establishes risk management requirements for solvency purpose that require insurers to address all relevant and material risks; 17. Capital adequacy. The supervisor establishes capital adequacy requirements for solvency purposes so that insurers can absorb significant unforeseen losses and to provide for degrees of supervisory intervention; 18. Intermediaries. The supervisor sets and enforces requirements for the conduct of insurance intermediaries, to ensure that they conduct business in a professional and transparent manner; 19. Conduct of business. The supervisor sets requirements for the conduct of the business of insurance to ensure customers are treated fairly, both before a contract is entered into and through to the point at which all obligations under a contract have been satisfied;

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20. Public disclosure. The supervisor requires insurers to disclose relevant comprehensive and adequate information on a timely basis in order to give policyholders and market participants a clear view of their business activities, performance and financial position. This is expected to enhance market discipline and understanding of the risks to which an insurer is exposed and the manner in which those risks are managed.

21. Countering fraud in insurance. The supervisor requires that insurers and intermediaries take effective measures to deter, prevent, detect, report and remedy fraud in insurance; 22. Anti-money laundering and combating the financing of terrorism. The supervisor requires insurers and intermediaries to take effective measures to combat money laundering and the financing of terrorism. In addition, the supervisor takes effective measures to combat money laundering and the financing of terrorism; 23. Group-wide supervision. The supervisor supervises insurers on a legal entity and group-wide basis; 24. Macroprudential surveillance and insurance supervision.

The supervisor identifies, monitors and analyses market and financial developments and other environmental factors that may impact insurers and insurance markets and uses this information in the supervision of individual insurers. Such tasks should, where appropriate, utilize information from, and insights gained by, other national authorities; 25. Supervisory cooperation and coordination. The supervisor cooperates and coordinates with other relevant supervisors and authorities subject to confidentiality requirements; 26. Cross-border cooperation and coordination on crisis management. The supervisor cooperates and coordinates with other relevant supervisors and authorities such that a crossborder crisis involving a specific insurer can be managed effectively.

Atty. Dennis B. Funa is the Insurance Commission’s deputy commissioner for legal services. Send comments to dennisfuna@yahoo.com.

Papal recognition: Francis boosts the cause of Palestinian statehood

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he Vatican announced last Wednesday that it will soon sign a treaty that will recognize Palestinian statehood.

Pope Francis’s decision to approve the treaty with the Palestinians made the Holy See the 136th state to recognize Palestine, but in moral terms the move counted for a good deal more than that. Since the US-led Israeli-

Palestinian peace talks collapsed last year, the Palestinian leadership has concentrated on strengthening its position in the world by diplomacy, fortifying its claim to sovereignty.

Vatican recognition is a big boost to that effort.

The pope is the spiritual leader for the world’s 1.2 billion Roman Catholics. About 60,000 Christians

live in Palestine, some of whom are Catholic. Although Pope Francis has worked closely with Jewish religious leaders and taken pains not to be viewed as anti-Semitic, his moral recognition of Palestine also indicates his position on Palestinian rights to land and its own state.

The Vatican’s action preceded by a day the installation of Israel’s new

coalition government, following the March 17 elections. The five-party coalition that Prime Minister Benjamin Netanyahu assembled—his conservative Likud party, two far right-wing and two ultra-Orthodox parties— firmly opposes negotiations toward a two-state, Israel-Palestine settlement of the long-standing problem.

Pope Francis’s decision also comes

as the financially based Boycott, Divestment and Sanctions movement gains ground in Europe and on some American college campuses.

Israel could easily improve its position by launching a new, goodfaith negotiating effort, with the goal of two states clearly stated, with or without US involvement. But the government’s more likely response

will be to expand the settler presence in the West Bank, diminishing the possibility of an agreement and a Palestinian state, all while instability is rising in the Middle East.

Pope Francis instead is pushing for peace between the Israelis and Palestinians through a reasonable course that would bring that about.

Pittsburgh Post-Gazette/TNS

2nd Front Page BusinessMirror

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PHL govt, private DOF, DTI harmonize Timta positions firms warned vs ‘China malware’ T Continued from A1

By Roderick L. Abad

HE Philippines is facing an advanced cyberthreat that is most likely backed up by the Chinese government, an American network security company warned on Tuesday.

FireEye revealed in its recent intelligence report, “APT 30 and the Mechanics of a Long-Running Cyber Espionage Operation,” that a cyber-espionage campaign has been targeting the state and business community in the country for almost a decade now.

The study, likewise, revealed that other Asean member-states, including Malaysia, Thailand and Vietnam, as well as India, have been consistently targeted by APT 30—a suspected China-sponsored advanced persistent threat (APT) group.

“Advanced threat groups like APT 30 illustrate that state-sponsored cyber espionage affects a variety of governments and organizations in the Philippines and Southeast Asia,” said Wias Issa, senior director at FireEye. “Governments and businesses in the Philippines [and the rest of the region] face persistent, well-resourced threat actors,” he added.

Cyber spying since 2005, APT 30 is one of the longest-running APT

groups that FireEye tracks, which deployed customized malware for use in specific campaigns targeting Asean members and others.

Of the 200 samples of its malware that were probed, it was found out that some were aimed at organizations in the Philippines.

Analysis conducted on APT 30’s malware also showed a methodological strategy to software development akin to that of established technology businesses—an approach that aligns closely to the different diplomatic, political, media and private-sector environments they intended to breach.

Issa did not comment on the decadelong overlapping claims of the Philippines, Malaysia, Vietnam and China over the South China Sea. He, however, said the study revealed that APT 30’s targets have information that could serve the Chinese government’s needs for intelligence about key Southeast Asian political, economic and military issues, disputed territories and discussions related to the legitimacy of the Chinese Communist Party.

“Broadly speaking, the issues in the region are things that the Chinese have expressed interest in, whether it be dissident issues or territorial disputes, maritime issues, or things See “China malware,” A2

are eyeing to approve Timta at the panel level on Wednesday [today],” Quimbo said.

He, however, said the joint DOF and DTI version is not yet the final version of the measure.

“I think what is important now is the two main departments that have different positions before are already in agreement...but as to whether their [DOF and DTI] final proposal is acceptable to everyone [here in the lower chamber], I cannot honestly say that,” the lawmaker said.

According to Quimbo, the House of Representatives is set to pass Timta on final reading before Congress’s sine die adjournment on June 11. The Timta is one of the priority measures of the 16th Congress.

Under the bill crafted by the DOF and the DTI, all registered business entities are required to file their returns and pay their tax liabilities using the electronic system used in the filing and payment of taxes.

The application for income tax holiday and/or other income tax-based incentives with the Board of Investments and other relevant investment promotion agencies (IPAs) shall only be accepted upon submission of the proof of filing of tax returns using the electronic system of the Bureau of Internal Revenue (BIR).

Data and information related to the tax-incentives claims of the registered business entities and the actual amount of tax and duty incentives granted submitted by the BIR and the Bureau of Customs to

the DOF shall be maintained by the finance department under a single database for the monitoring and analysis of tax incentives granted.

“For the purposes of this act, tax incentives claimed shall refer to the incentives reflected in the tax returns filed by registered business entities with the BIR, as well as the tax and duty incentives reflected in the import entries of the IPA-registered firms,” the DOF-DTI bill said.

The measure also provides that the aforesaid data and information shall be reflected by the Department of Budget and Management (DBM) in the annual Budget of Expenditures and Sources of Financing (BESF), which shall be known as the Tax Incentives Information (TII) section.

The TII shall be limited to the aggregate data related to incentives availed of by registered business entities based on the submission of the DOF and concerned IPAs. The data will be categorized by sector, by IPA and by type of incentives.

The bill also directs the DBM to submit the BESF to the President and to Congress.

The measure also provides that the National Economic and Development Authority (Neda) shall conduct costbenefit analysis on the incentives to determine the impact of tax incentives on the Philippine economy.

“All heads of the IPAs shall submit to the Neda investment-related data that shall include, but not limited to, the list of registered business entities, investment projects, investment cost, actual employment and export earnings,” the measure said.

The draft bill also said repeated violations of the act shall be penalized with the cancellation of the registration of the business entity.

“Any government official or employee who fails without justifiable reason to provide or furnish data or information as required under this act, shall be punished by a fine equivalent to that official’s or employee’s basic salary for a period of one month to six months, or by suspension from government service for not more than one year, or both, in addition to any criminal and administrative penalties imposable under existing laws,” it said.

The bill said any amount necessary to carry out the implementation of this act in the first year shall be sourced from the unprogrammed funds in the current General Appropriations Act. Meanwhile, the House of Representatives approved on Tuesday two Palace priority measures—the Philippine Fair Competition Act and proposed amendments to the cabotage law. These bills are also backed by local and foreign business groups.

House Bill (HB) 5286, or “An Act Promoting a National Competition Policy for the Philippines, Prohibiting Anti-competitive Agreements, Abuse of Dominant Position and Anti-competitive Mergers and Acquisitions,” establishing the Philippine Competition Commission; and HB 5610, or “An Act Allowing Foreign vessels to Transport and Coload Foreign Cargoes for Domestic Transshipment and for Other Purposes”; have been unanimously ap-

proved on final reading.

The fair-competition bill aims to minimize, if not totally eradicate, unfair competition, monopolies and cartels.

The bill also proposes to create the Philippine Competition Commission that will prosecute those engaged in unfair and deceptive trade practices, ,and other such practices with the purpose of preventing, restricting or distorting competition.

Cabotage law

HB 5610, an act that allows foreign vessels to transport and co-load foreign cargoes for domestic transshipment and for other purposes, aims to promote competition in the shipping industry.

Under the bill, co-loading shall refer to arrangements between two or more international or domestic sea carriers, whereby a sea carrier bound for a specified destination agrees to load, transport and unload the container van cargo of another carrier bound for the same destination.

Currently, the 57-year-old Tariff and Customs Code of the Philippines said the right to engage in the Philippine coastwise trade is limited only to vessels carrying a certificate of Philippine registry.

The measure seeks to assist importers and exporters in enhancing their competitiveness in the light of intensifying international trade and to lower the cost of shipping containerized export cargoes from Philippine ports to international ports and containerized import cargoes from international ports. Jovee Marie N. dela Cruz