Sy Jr. owns, may develop CBP on reclaimed land–SC

By Joel R. San Juan @jrsanjuan1573

THE Supreme Court has upheld tycoon Henry Sy Jr.’s ownership and right to develop the 19,274-square-meter lot of the Central Business Park (CBP)-1 Island A in the Manila-Cavite Road Reclamation Project into a commercial, residential and recreational complex.

I n a 30-page ruling penned by Senior Associate Justice Marvic Leonen, the Courts Second Division rejected the Public Estates Authority (PEA) petition to set aside the Court of Appeals’ February 27, 2013 decision affirming the February 28, 2008 order of the trial court ordering PEA to “convey and transfer the title and ownership” of the property as repayment for the P85-million advance made by Sy, through his assignor Shoemart Inc. (Shoemart).

P rior to this, the PEA, the Philippine National Construction Corporation and Shoemart entered into an agreement on May 12, 1994 to develop CBP-1 Island A.

T he agreement has PNCC affirming Shoemart’s acquisition of the right to jointly exercise PNCC’s preferred option to develop CBP-1 Island, since Sy’s company made the highest bid of P250 million representing 70-percent equity interest in the joint venture with PNCC.

Subsequently, Shoemart will buy out all of the interests of PNCC in CBP-1 Island A representing the P250 million bid and the 30- percent PNCC equity PNCC, for a total amount of P303 million.

U nder the agreement, Shoemart is required to undertake the land development based on PEA’s plans indicated in the Master Development Plan within a period of three ears from approval of the Joint Venture Agreement and the project by all government authorities having jurisdiction over the CBP-1 project, which may be extended for a period not exceeding two years upon written request of SM.

O n August 9, 1994, the PEA and Shoemart forged an agreement to develop Central Business Park, which requires PEA to undertake relocation of the squatters occupying the area, with Shoemart’s assistance.

T he agreement requires Shoe - mart to advance the funds for the relocation.

O n June 29, 1995, Shoemart agreed to advance P85,000,000.00 within 90 days from February 23, 1995, to relocate the squatters at CBP-1 Island A.

A fter four years, the PEA advised Shoemart that the appraisal value of the property at the time of the drawdown was P4,410.00 per square meter; thus, the P85 million advanced by Shoemart was equivalent to 19,274 square meters.

I n a February 2, 2004 letter, the PEA informed Shoemart that the land it identified was approved by their board of directors under Board Resolution No. 3398.

O n August 18, 2004, Shoemart assigned all its rights, interests, and participation to Sy.

However, a legal battle ensued between Sy and PEA after the latter did not act favorably on the former’s request for conveyance of the property, citing the need to refer the matter to the Commission on Audit (COA).

T he PEA sought COA’s opinion on whether the land value should be appraised on the date of the drawdown or at present.

T his prompted Sy to file a civil case against PEA, alleging that despite the advance payment for the relocation of the informal settlers and the board of directors’ approval of the identified area, it still failed to execute the necessary instrument for conveyance. more important thing is to know what happens in the six months to one-year period.

PEA countered that it was more prudent to first seek COA’s advice on whether it is proper to use the appraisal value at the time of the drawdown, considering the length of time that has passed before the parties agreed on the site to be conveyed.

I n upholding CA’s ruling, the SC denied PEA’s claim that there was grave abuse of discretion on CA’s part in dismissing its appeal and motion for reconsideration.

The contracting parties are bound by the stipulations in their agreement as obligations resulting therefrom have the force of law between them and should be complied with in good faith,” the SC pointed out.

It noted that the agreements between the parties clearly stated that the basis for petitioner’s conveyance of the property to Shoemart should be based on the current appraisal value at the time of the drawdown.

Since respondent, through Shoemart, had already advanced the P85 million pursuant to the terms of their agreements and the identity of the land to be conveyed was already duly approved by petitioner’s board of directors, there is nothing left to do but to execute the necessary instrument for conveyance in respondent’s favor,” the SC said.

I n terms of its impact on monetary policy rates, Remolona said, there are limits in terms of how much more interest rates can rise.

R emolona said the country is “nearing our full capacity” in terms of interest rates. This means, if the Monetary Board will raise interest rates on August 17, it cannot be too high.

“ I think we’re very close to our full capacity at this point so that means, if we’re going to hike, we have to be very careful not to hike too much; siguro konti lang siguro muna [maybe just a little] but if we’re gonna cut, there’s room to cut. So wait until August 17,” Remolona said.

I n terms of resorting to a pause, Remolona said, this will only happen if the data that Monetary Board receives is conflicting or inconsistent with each other.

“ Usually, the pause is because we wanna reassess and if the data that comes are not quite consistent with each other, and we are scratching our heads [thinking, ‘what really happened’?] then the thing to do is pause. We don’t wanna raise just because we feel like raising, we wanna know why we’re raising. Isn’t that the way it should be,” Remolona said.

T he BSP Governor added that the Monetary Board will take into consideration the forward guidance of the United States Federal Reserve as well as the BSP when making its decision.

T his is because interest rate hikes, particularly of the US Federal Reserve, do not only impact the country’s economic growth and investment potential but also its foreign exchange rates.

What we observed, it’s not just the differential that matters, it’s also the forward guidance by the Fed, forward guidance by the BSP about the likelihood of future moves,” Remolona said.

“So we found when we were kinda hawkish in our forward guidance the peso actually—even with the differential narrowing—the peso actually got stronger,” he added.

Rice as driver RICE may again be the cause of higher inflation in the coming months as Philippine Statistics Authority (PSA) data showed that prices returned to levels that were seen prior to the implementation of a law that sought to bring down the price of the staple.

O n Friday, the PSA reported that inflation averaged 4.7 percent in July 2023 and was the lowest in 16 months. (Full story here: https:// businessmirror com.ph/2023/08/04/commodity-prices-hit-16-month-low-injuly-psa/).

PSA data showed, however, rice inflation averaged 4.2 percent in July 2023, the highest since February 2019 when the increase in the commodity’s prices was at 4.5 percent. The Rice Trade Liberalization (RTL) Act was implemented in March 2019.

T he IAC-IMO is reviewing the tariff rates on imported food and non-food items, Abenoja added.

A benoja said they do not want to preempt the results of the Tariff Commission’s comprehensive review of the country’s tariff structure after he was asked if the DOF is looking into the possibility of making the reduced tariff rates on the commodities permanent for at least the next five years.

“ We are participating in that review. That is being reviewed together with other private sector partners so we can prepare both the government and the stakeholders for any adjustments in the tariff structure. We do not want to preempt the results of that review,” Abenoja explained.

Automatic SPSIC approval

THE DOF is also pushing for the implementation of a system that would automatically approve sanitary and phytosanitary import clearance (SPSIC) applications for all imported commodities.

T he system, the finance officials noted, is akin to the present SPSIC system being implemented for imported rice as mandated by the rice trade liberalization (RTL) law.

For rice imports, SPSIC applications are deemed automatically approved after seven days of filing before the Bureau of Plant Industry (BPI) in the absence of proper rejection or denial from the regulatory agency.

“ Measures will also be implemented by the government to facilitate the issuance of sanitary and phytosanitary import clearance [SPSIC] and the enactment of a policy on the automatic approval of SPSIC application,” the DOF said in a separate statement.

T he DOF said the Sugar Regulatory Administration (SRA) is also set to issue import guidelines “with a more predictable regime” for the direct importation by industrial users for their sugar requirements.

T hese measures, the DOF said, are aimed at further slowing down the country’s inflation print which has slid to 4.7 percent in July. Jasper Emmanuel Y. Arcalas

“ They hiked by only 25 basis points. That means what people usually look at is the differential between the target Fed funds rate and our own RRP [Reverse Repurchase] policy rate,” Remolona said.

“ That differential has narrowed by 25 basis points, so normally that weakens the peso. But actually what market participants do is look forward to what will happen in the next few meetings; and looking at the next few meetings it doesn’t look like the differential will narrow further, that is why the peso remains stable despite the hike by the FOMC [Federal Open Market Committee],” he added.

R emolona said the peso moves according to the forward guidance by the BSP, not just at the differential itself or “what happens in the differential over the next few meetings.”

He said the differential right now is between 75 and 100 basis points. But, Remolona said, the

National Statistician Claire Dennis S. Mapa said rice prices this year gradually increased starting in February when inflation for the staple posted a 2.2-percent increase; March, 2.6 percent; April, 2.9 percent; May, 3.4 percent; and June, 3.6 percent before reaching 4.2 percent in July.

M apa said that in July, similar to June, the PSA also recorded increases in the price of all rice varieties that they monitor— regular milled, well-milled, and special rice.

Based on data, Mapa said regular milled rice prices averaged P41.50 per kilo, higher than the P41.20 per kilo in June and P39.60 per kilo in July 2022.

For well-milled rice, Mapa said the average price was at P45.50 per kilo in July, higher than the P45.20 in June and P43.90 in July 2022.

Special rice, Mapa added, averaged P54.60 per kilo in July, higher than the P54.40 posted in June and P53.10 in July 2022.

D ata obtained from PSA also showed that average regular milled rice prices started climbing in March 2022 at P38.97 per kilo, while special rice, the most expensive rice variety, started increasing from P52.96 per kilo in June 2022.

Digitalization...

Nonetheless, the BIR will fasttrack its digitalization efforts with the goal of cutting by half the number of physical transactions done at its offices before the year ends, Lumagui said.

“ If we cannot hire more people, then [we will push for] automation [of] processes through digital transformation which will help us address the lack of manpower,” he added.

L umagui explained that the BIR plans to migrate some of its transactions to online to remove the need for taxpayers to transact physically in their respective offices.

“ Hopefully we can reduce the physical transactions by half. The problem is that even if online services are available, sometimes the taxpayers still want to go to our offices and refuse to use the online services because they are still comfortable [transacting] with people [physically],” he said.

T he BIR chief said plugging the gap in its excise tax collections re -

Continued from A1 mains a priority since the government is unable to capture about 20 percent of the total collections. We are targeting to minimize that 20 percent. I am sure we will be able to cut that by more than half this year,” Lumagui said.

We are aggressive in all our enforcement activities,” Lumagui added.

O ne measure that BIR will do to boost its excise tax collections, particularly on vapor products, is to require importers and manufacturers of juices used in vape products to secure an Authority to Release Imported Goods (ATRIG) from the BIR, he said.

T he issuance of an ATRIG would allow the BIR to monitor and regulate the importation of raw materials used in the production of vape juices, Lumagui explained.

A TRIG is a licensing document imposed by the government through the BIR on imported products that are required to pay excise tax prior to the release of the shipments to the domestic market.

AFP scores CCG for harassing PHL supply ships near Ayungin

By Rex Anthony Naval

THE Armed Forces of the Philippines (AFP) on Sunday condemned the China Coast Guard (CCG) for its “excessive and unlawful actions” against Filipino vessels engaged in a “routine troop rotation and resupply” (RORE) mission last August 5.

This was after a CCG vessel “blocked and water cannoned” one of the chartered supply boats while it was en route to Ayungin Shoal in the West Philippine Sea, AFP Spokesman Col. Medel Aguilar was quoted in a statement issued last Sunday.

Aguilar added that the Chinese vessel did this without thinking about the safety of those aboard and in violation of international law.

“One of our chartered supply boats was blocked and water cannoned by a CCG vessel yesterday, August 5, while en route to Ayungin Shoal for a routine troop rotation and resupply mission, in wanton disregard of the safety of the people on board and in violation of international law, particularly the 1982 United Nations Convention on the Law of the Sea (Unclos) and the 2016 Arbitral Award,” Aguilar said. (Related story in Second Front Page, A12, “3 Quad members, senators hit China’s Ayungin blockade.”)

And because of the CCG’s dangerous maneuvers, the AFP spokesperson said the second supply boat was not able to unload the supplies and could not complete the RORE mission.

“We call on the CCG and the

Central Military Commission to act with prudence and be responsible in their actions to prevent miscalculations and accidents that will endanger peoples’ lives,” Aguilar said.

A report by China Daily quoted a spokesman of the China Coast Guard (CCG) as saying the CCG “expelled four Philippine vessels that illegally entered the waters near the Ren’ai Reef last Saturday in accordance with the law.” Gan Yu, the spokesman, said in a brief statement that “without” Chinese government approval, “two Philippine supply vessels and two Philippine coast guard vessels illegally entered waters adjacent to the Ren’ai Reef of China’s Nansha Islands on Saturday.”

The China Daily report added that the Chinese coast guard merely conducted “necessary control” in accordance with the law and prevented the Philippine ships carrying “illegal construction materials.” Gan, said China Daily, urged the Philippines “to immediately stop its infringing activities in the waters, stressing that China has indisputable sovereignty over the Nansha Islands and their adjacent waters, including the Ren’ai Reef.”

The CCG “will continuously carry out rights protection and law enforcement activities in the waters under China’s jurisdiction in accordance with law,” China Daily, the official government owned English-language newspaper of the People’s Republic of China, further quoted Gan as saying.