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THURSDAY, AUGUST 1, 2019
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PH fires off protest vs China What’s so special about Bingbong compared with Wanda? IN MY LINE AGAYOF SIGHT T AY Re p . Abraham “Bambol” Tolentino has been elected as the new chairman of the Philippine Olympic Committee (POC), the body that will oversee the 30th Southeast Asian Games that will be held here in November this year.
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RAMON T. TULFO
äIn my line of sightA5
Is VP Robredo guilty? Also Secretary Duque?
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REPUBLIC SERVICE RICARDO SALUDO
HAT i f P e t e r Joemel Advincula, who claims to be the “Bikoy” accusing President Rodrigo Duterte’s close family and associates of narcotics activities, makes another about-face, and says he was induced to accuse opposition figures and Catholic clergy of plotting to unseat Duterte?
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BY BERNADETTE E. TAMAYO
HE Philippine government has filed another diplomatic protest against China, this time in connection with the swarming of over 100 Chinese vessels in Pag-asa Island in the West Philippine (South China) Sea.
South China Sea. Sen. Emmanuel Joel Villanueva urged Locsin to “reveal the contents of the protest, especially that our National Security Adviser [Esperon has] raised the alarm on threats to our country’s national security.” Sen. Panfilo Lacson said the encircling of Pag-asa Island by Chinese vessels is part of China’s “cabbage strategy” to grab
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CoA hits low use of free college fund OF the P44.7 billion that the government allotted for the free college tuition and other scholarship programs in 2018, only P22.7 billion was used, according to the Commission on Audit (CoA). In its audit report on the Commission on Higher Education (CHEd), CoA said fund utilization was low for the Universal Access to Quality Tertiary Education (UAQTE) or free college tuition program, Philippine California
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AFP MULLS MARTIAL LAW IN NEGROS ORIENTAL
NewsA2
THROWING THE BABY OUT WITH THE BATHWATER
Antonio ContrerasA4
DWELO! 2019
EntertainmentD4
IT’S BACK!
A draw coordinator starts the ball rolling during the lotto draw at the PCSO office in Mandaluyong City on Wednesday. PHOTO BY RUY L. MARTINEZ
PACC to probe PCSO officials
What’s inside
SEARCH FOR THE NEXT BIG OPM BAND HITS ANTIPOLO
“Diplomatic protest fired off,” Foreign Affairs Secretary Teodoro Locsin Jr. tweeted on Wednesday shortly after National Security Adviser Hermogenes Esperon Jr. sought the filing of a protest over the reported presence of at least 113 Chinese vessels around Pag-asa (Thitu) Island on July 24. Pag-asa is the biggest island occupied by the Philippines in the contested
PACQUIAO, THURMAN RESPECT ONE ANOTHER
SportsC1
THE Presidential Anti-Corruption Commission (PACC) on Wednesday said it would conduct a lifestyle check on the officials of the Philippine Charity Sweepstakes Office (PCSO) amid allegations of massive corruption in the agency.
PACC Commissioner Greco Belgica confirmed that they were investigating officials of the charity agency, including its former general manager Alexander Balutan. “We will be conducting a lifestyle check against all of them after the
pronouncement of the President that he closed down PCSO operations for massive corruption,” Belgica said. “[This is] on top of the cases that are already pending before us,” he added. The Department of Justice had also
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Go seeks more drug rehabilitation centers SEN. Christopher Lawrence “Bong” Go has filed a bill that seeks to establish additional drug abuse treatment and rehabilitation centers nationwide. Under Senate Bill 399, each province shall have one drug abuse treatment and rehabilitation center supervised by the Department of Health (DoH). “Nais natin na magkaroon ng mga drug rehabilitation centers ang bawat probinsya sa buong bansa. Ang mga centers na ito ang tutulong sa mga drug dependents upang magamot ang kanilang adiksyon at matulungan silang mamuhay ng normal muli (We want to have drug rehabilitation centers in every province nationwide. n Sen. Christopher ‘Bong’ Go talks with senators These centers will help drug Francis Tolentino and Ronald dela Rosa at the Senate. dependents cure their addiction in order for them to live CONTRIBUTED PHOTO
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»Foreign BusinessB4
AN Miguel Corp. is assured of clinching the government contract to construct and run its planned P735-billion New Manila International Airport (NMIA) in Bulacan province after no other company countered its unsolicited proposal with a better one. The so-called Swiss challenge for the listed conglomerate’s offer to build the air hub in the province’s Bulakan town — seen to help decongest the Ninoy Aquino International Airport in Pasay City once it is finished — ended on Wednesday. In a mobile message, Giovanni Z.
Lopez, Transportation assistant secretary for procurement and project implementation who led the Bids and Awards committee, said that since there were no challengers, San Miguel, as the original proponent, would be awarded the contract in accordance with the Build-Operate-Transfer Law.
n Transportation Assistant Secretary Giovanni Z. Lopez. PHOTO FROM THE DEPARTMENT OF TRANSPORTATION FACEBOOK PAGE He added, however, that the company has to “comply with some conditions in our notice of award (NOA).” For her part, Transportation Assistant Secretary for Communications Goddes Hope Libiran said in a Viber message
these conditions included the need to “post performance security” and show “proof of commitment.” This security may be in the form of cash representing a minimum of 2 percent of the project’s cost; irrevocable letter of credit representing a minimum of 5 percent of the project’s cost; and a surety bond representing minimum 10 percent of the project’s cost. “Any combination would suffice so as not to delay compliance,” Libiran said. San Miguel has 20 days to comply with the conditions, according to Lopez. Once these are met, the notice to proceed may be awarded to the company by the first week of September.
are seen to temper inflation pressure during the month.” Latest PSA data show that prices of the staple decreased in the second week of July, with the average wholesale price dipping by 0.3 percent from P39.08 per kilogram the week before. Energy companies, meanwhile, implemented a per-kilogram price rollback of P3.36 to P3.40 for LPG effective July 1. On the other hand, the Manila Electric Co.’s per kilowatt-hour (kWh) rate for households consuming 200 kWh monthly was trimmed by P0.1068 last month. The local currency hit its strongest level so far this year on July 30, closing P50.89 against the US dollar. “These could be partly offset by higher prices of petroleum and
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TRADE BEN KRITZ
6.1 quake located 100 kilometers away in Zambales. There was no significant damage to people or property in Metro Manila (Pampanga, unfortunately, was not so lucky), but the tremor was enough to bring the city to a virtual standstill for a time. Unfortunately, Lorenzana’s warning will fall on deaf ears, even with that recent memory to reinforce it. Part of that is human nature; people anywhere tend to appreciate risks only in proportion to their actual experience. Half the population wasn’t even alive the last time Luzon was affected by a really serious earthquake (in 1990), and one has to go almost that far again back in history (to 1968) to find one that caused considerable damage and injury in Manila itself. To all but the few who experienced those firsthand, any warning is an abstraction. That would be a recipe for disaster even if Metro Manila was anywhere close to being prepared to withstand and respond to an earthquake, which it is not. The damage even a moderate earthquake would cause to buildings – more than a third of which are charitably described as “informal dwellings,” and most of the rest being constructed with a casual regard for building codes – would
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BSP: M3 growth steady in June
LOOK WHO’S TALKING
United States Trade Representative Robert Lighthizer (center) gestures as he chats with Chinese Vice Premier Liu He (right) as US Treasury Secretary Steve Mnuchin looks on after posing for a “family photo” at the Xijiao Conference Center in Shanghai on Wednesday. Chinese and US negotiators held talks in the Chinese city in a bid to bring an end to a year-long trade war, with the meeting overshadowed by a Twitter tirade from US President Donald Trump. AFP PHOTO See story on B4
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Not ready for the ‘big one’ 5G rollout in PH ‘limited’ – Fitch I ROUGH
F an earthquake of similar magnitude to the one that recently struck the Batanes Islands occurred in Metro Manila close to half a million people would be killed or injured, Defense Secretary Delfin Lorenzana told the media on Tuesday. That estimate might sound a little outlandish, but Lorenzana is probably right, or very close to it. A serious earthquake in this poorly designed and equipped metropolis, densely packed with a complacent population whose default response to even mild natural phenomena is helpless panic, would be an epic catastrophe. Or will be, rather, as the geologic and historic records indicate that the “Big One,” a strong earthquake along the Marikina Valley Fault System occurs with some regularity. As one of the officials who would be chiefly responsible for responding to such a disaster, Lorenzana’s worries are completely understandable. Lorenzana arrived at his frightening estimate through simple math, scaling up the human toll of the Batanes quake, which affected about 20,000 people and killed nine and injured about 70, to the 20 million or so population of greater Metro Manila. Lorenzana’s unscientific guess of 62,000 dead and 434,000 injured may even be a little optimistic. The two earthquakes in Batanes had magnitudes of 5.4 and 5.9, respectively; according to seismologists, the “Big One,” when it occurs, is likely to have a magnitude of close to 7.0, or about 10 times as strong. Metro Manila got a hint of what a major earthquake could do when the city was rattled by a magnitude
B a n g ko k 0 . 3 2 %
San Miguel set to build P735-B Bulacan airport S
July inflation likely eased to between 2 and 2.8% INFLATION likely eased further to between 2 and 2.8 percent last month on the back of reduced rice, fuel and power prices, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday. In a statement, the central bank said its Department of Economic Research projected consumer price growth “to settle within” that range last month, lower than 5.2 percent in the same month in 2018. Headline inflation slowed to 2.7 percent in June from 3.2 percent in May. The Philippine Statistics Authority is set to release official July inflation data on August 6. The BSP said “lower rice and domestic LPG (liquefied petroleum gas) prices, along with [the] downward adjustment in electricity rates and the recent peso appreciation,
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S W I S S C H A L L E N G E E N D S W I T H O U T R I VA L O F F E R S
BY LISBET K. ESMAEL
»Corporate NewsB3
US, CHINA WRAP UP TRADE TALKS
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THURSDAY AUGUST 1, 2019
Business Times
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DESPITE the publicized efforts of telecommunications companies (telcos) to roll out services powered by superfast Fifth Generation (5G) technology in the Philippines, Fitch Ratings presented a bleak outlook for its initial adoption. In a report on Tuesday night, the global debt watcher said 5G reach in the country remained “uncertain,” and expected its rollout “to be limited this year, considering the early stage of adoption and deployment, particularly in a predominantly prepaid market like the Philippines.” Such adoption, Fitch Ratings
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said, may lie in the affordability and availability of devices, which should be 5G-ready. “Prices of 5G customer-premises equipment would need to fall considerably for mass-market adoption to take place in emerging markets,” it added. “The Philippine government has also not formally identified the 5G spectrum band for telcos,” Fitch Ratings noted. The report comes after one of the country’s leading telcos, Ayalaled Globe Telecom Inc. recently introduced 5G-powered services, mainly to its home subscribers. It made these services commer-
cially available on Saturday in Buting village in Pasig City, offering speeds of up to 100 megabits per second and data capacity of up to 2 terabytes. Globe aims to also offer these services in two dozen more areas, including Greenpark in Cainta town, Rizal province; Woodland Hills in Carmona town, Cavite province; and Carissa Homes 2A and 2B, Palmera Homes in San Jose del Monte City, Bulacan province. Another telco, PLDT Inc., is poised to introduce its own 5G services by early 2020, delaying
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The business of VAT
HERE is a specific rationale behind the imposition of valueadded tax (VAT). VAT was not intended to be imposed on every transaction or transfer. Its imposition must bear some relevance to the taxpayer’s role or link in the production chain. While ultimately it is a tax on consumption (since the final consumers bear the entire VAT), VAT is actually assessed on various levels of the production chain and imposed based on the “value-added” or contribution by the taxpayer in the production chain. The absence or presence of profit is immaterial. Our Tax Code (Republic Act No. 8424, as amended) makes it clear that VAT is imposed on any person who, in the course of trade or business, sells, barters or exchanges goods, renders services, or engages in similar transactions and any person who imports goods. The overriding
MORE TO FOLLOW (MTF)
EUNEY MARIE MATA-PEREZ principle is that it is imposed “in the course of trade or business”. Ergo, if the transfer is not in the course of trade or business, no VAT should be due. The phrase “in the course of trade or business” is defined to mean the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person, regardless of whether or not the person engaged therein is a nonstock, nonprofit organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or govern-
ment entity. It requires regularity-the regular conduct or pursuit of a commercial or an economic activity regardless of whether or not the entity is profit-oriented. In the recent case of Power Sector Assets and Liabilities Management Corporation [PSALM] v. Commissioner of Internal Revenue (G.R. No. 226556, July 3, 2019), the Supreme Court reiterated its ruling in an earlier case involving the same parties that no VAT should be due on the transfer by PSALM of its assets pursuant to its mandate under the EPIRA Law (Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001) to privatize assets of the National Power Corporation (NPC). The Supreme Court held that the sale of the power plant was not in pursuit of a commercial or economic activity but a governmental function
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GROWTH in the country’s money supply was steady in June amid the continued slowdown in bank lending, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday. Domestic liquidity or M3 rose by 6.4 percent year-on-year to P11.776 trillion, unchanged from May’s expansion rate. Month-onmonth and seasonally adjusted, M3 rose by 0.1 percent. “Demand for credit eased slightly, but remained the principal driver of money-supply growth,” the central bank said in a statement. Expansion in domestic claims
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Trump tweets sink bourse to 3-week low SHARE prices fell to a three-week low on Wednesday as investor sentiment was hurt anew by US President Donald Trump’s latest attack on China. The benchmark Philippine Stock Exchange index (PSEi) declined by 1.28 percent or 104.66 points to close at 8,045.80, a level last seen on July 10, 2019, when the index settled at 8,078.21. The broader All Shares dropped by 0.93 percent or 46.02 points to finish at 4,890.06. Regina Capital Development Corp. head of sales Luis Limlingan blamed losses on Trump’s series of tweets attacking China, one of which saying “China is doing very badly, worst in year 27” adding that negotiators din’t come through on agreements. Trump also said China was choosing to delay an agreement until after the 2020 US presidential elections to see if a Democrat wins the seat. Trump’s tweets came amid the new leg of trade talks between Washington and Beijing this week. In the domestic front, Limlingan said investors digested mixed earnings results for the first half. The local market traded in line with global counterparts. Wall Street’s main indices were all down overnight, while in the region, Tokyo dropped 0.85 percent, Shanghai declined 0.67 percent, Hong Kong fell 1.31 percent, Seoul decreased
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