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TUESDAY, JULY 23, 2019
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You will have your karma, Bingbong Medialdea
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H Y IN MY LINE can’t OF SIGHT Executive Secretary Salvador “Bingbong” Medialdea face the fact that he’s now a government official and that criticisms leveled against him are par for the course? äTulfoA5
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RAMON T. TULFO
Beneath the Teflon
HERE is no ON THE doubt CONTRARY about it. Rodrigo Roa Duterte has become a certified Teflon President. Many of his critics were hoping that his satisfaction, trust and approval ratings would be dented by the Recto Bank incident. But when the results came out, what we saw was a President retaining his phenomenally high numbers.
ANTONIO CONTRERAS
n With Senate President Vicente Sotto 3rd and Speaker Alan Peter Cayetano behind him, President Rodrigo Duterte bares his legislative program at the House of Representatives. PHOTO BY DJ DIOSINA
DUTERTE SEEKS DEATH FOR DRUGS, CORRUPTION
‘I will end my term fighting’
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BY CATHERINE S. VALENTE
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UOYED by the victory of his allies in the recent elections and his high approval rating, President Rodrigo Duterte on Monday vowed to continue the reforms that his administration started and boldly push for the äFightingA2 revival of the death penalty to curb illegal drugs and corruption in government.
What’s inside HUNGER INCIDENCE UP IN Q2 NewsA2 FEDERALISM IS GOOD BUT I’M OUT – DUTERTE
WEST PH SEA IS OURS – DUTERTE PRESIDENT Rodrigo Duterte asserted the Philippines’ ownership of the West Philippine (South China) Sea on Monday, but maintained that he would use diplomacy in addressing the country’s
dispute with China to avoid a “shooting war.” “The West Philippine Sea is ours, no ifs and buts,” he said in his fourth State of the Nation Address (SONA).
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Sotto, Cayetano take helm of 18th Congress
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SENATORS on Monday reelected Sen. Vicente Sotto 3rd as Senate president, while at the House of Representatives, Taguig Rep. Alan Peter Cayetano
BEA ALONZO SWIPES AT GERARD ANDERSON EntertainmentF1
He renewed his pledge that his administration would stand up for the Philippines’ rights in the disputed sea in “due time,” as he defended his fishing
was installed as speaker. Sen. Ralph Recto was reelected as president pro tempore and Sen. Juan Miguel Zubiri was voted majority leader, while
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Congress prodded on new salary law PACQUIAO MULLS FUTURE AFTER TITLE STUNNER SportsE1
n Senate President Vicente Sotto 3rd PHOTO BY ENRIQUE AGCAOILI
PUBLIC school teachers were not far from the mind of President Rodrigo Duterte when he delivered his State of the Nation Address (SONA) on Monday as he urged Congress to pass a new version of the Salary Standardization Law.
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PSEi
P51.07 TO $1
8,246.83 DOWN 0.28%
TUESDAY JULY 23, 2019
Business Times
BEYOND BUZZWORDS
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D U T E R T E TO L AW M A K E R S :
‘Pass Trabaho bill, other tax measures’ P BY MAYVELIN U. CARABALLO
RESIDENT Rodrigo Duterte on Monday urged the 18th Congress to pass the remaining packages of his administration’s tax reform program, which he said would help finance its efforts to reduce poverty in the country. During his fourth State of the Nation Address, Duterte implored “Congress to immediately pass Package 2 of the Comprehensive Tax Reform Pro-
gram (CTRP) or the Trabaho bill,” saying the program would “fund our poverty-reduction programs.” According to him, the package — formally known as House Bill 8083, or the Tax Reform for Attracting Better and Higher-quality Opportunities measure — “will gradually lower the corporate
SONA 2019
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n Manila Mayor Francisco “Isko” Moreno Domagoso (left) and Trade Secretary Ramon Lopez (in barong)at the launch of the Bagong Maynila Business One-Stop Shop at Manila City Hall on Monday. PHOTO FROM THE MANILA PUBLIC INFORMATION OFFICE FACEBOOK PAGE
that the market lacked fresh leads to buoy trading, a view echoed by Philstocks Financial Inc. The local market traded in line with its regional peers, as Tokyo decreased by 0.23 percent, Shanghai fell 1.27 percent, Hong Kong declined 1.47 percent, Seoul dipped 0.05 percent, Jakarta lost 0.48 percent, Singapore slipped 0.81 percent, and Bangkok was down by 0.42 percent. On Friday, Wall Street’s main indices were also down, with the Dow Jones, S&P500, and Nasdaq shedding 0.25 percent,
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Manila LGU opens BOSS in City Hall THE Manila city government launched on Monday the Bagong Maynila Business One-Stop Shop (BOSS), which aims to reduce beginning next year the process in issuing business permits, and the time in securing them to one hour. On the sidelines of the BOSS’ soft launch in Manila City Hall, Mayor Francisco “Isko” Moreno Domagoso said that before, it would take the city government between eight days and a month to issue a business permit to
an applicant, and that business owners had to take eight steps before securing that permit. With BOSS, that process is cut to three: file, pay and claim. The permit could be issued within one hour to a day, as long as all requirements are met. BOSS will begin in January, in time for the expected renewal of business permits. Expecting a surge in the number of applicants, the Manila government signed also on Monday a memorandum of
understanding with SM Prime Holdings Inc. to allow the former to use SM Manila’s activity area for the BOSS’ satellite branch for free. This comes after Domagoso signed earlier this month Executive Order 8, or an ordinance promoting the ease of doing business in Manila. This was in compliance with Republic Act 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
ROUGH TRADE BEN KRITZ (Association of Southeast Asian Nations) manufacturers,” he added. Philexport is right (and so is everyone else who has argued against the two measures) in the sense that the only objective result of SB 1826 or the 14th month pay proposal will be to increase labor costs without a certain corresponding increase in labor value. Labor is a basic input, so unless a higher cost is balanced by some other advantage, many enterprises will seek a better deal elsewhere. SB 1826 raises costs by seeking to eliminate virtually all forms of contract labor, because permanent employees cost more. The 14th month pay proposal also raises costs, but
in a more direct way. Between the two measures it is the latter that is actually more worrisome. SB 1826 is alarming, but the idea is so defective and detached from reality that it will probably fail quickly if it is actually enacted, and either be withdrawn or more likely, become yet another of the thousands of Philippine laws that are ignored for being impossible to comply with or enforce. The 14th month pay proposal, however, is an altogether different story. It calls for all non-governmental, non-executive workers to receive an additional month’s pay on top of the already required 13th month pay. For many businesses, particularly MSMEs that make 99 percent of all Philippine enterprises, the cost will be too great to justify maintaining their current workforce levels. Job losses will be the result, because instead of lowering their margins many firms may choose to reduce their workforces.
THE government posted a narrow budget deficit in June as revenue collections surged and state spending weakened, the Bureau of the Treasury (BTr) said on Monday. In a statement, the Treasury said last month’s P41.8-billion deficit reversed the P2.6-billion surplus in May, but marked a 22.93-percent (P12.5-billion) decrease from the P54.3-billion shortfall a year ago. Government revenues rose by 4.32 percent to P233.9 billion in June from P224.2 billion last year, while expenditures declined by 0.99 percent to P275.7 billion from P278.5 billion. A month earlier, revenues grew by 22.5 percent and expenditures expanded by 7.8 percent. Last month’s deficit reduced the first-half shortfall to P42.6 billion, 77.91 percent lower than the P193 billion posted in January-to-June 2018. For June alone, the Bureau of Internal Revenue (BIR) accounted for the bulk of revenues with P157.8 billion, a 15.39-percent increase from P136.8 billion a year earlier. The growth was slower than May’s 19.1 percent. The Bureau of Customs (BoC) netted P51.3 billion — a 2.50-per-
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What’s inside
Put a stop to Congress’ economic sabotage
VER the weekend, the Philippine Exporters Confederation (Philexport) added its voice to the growing chorus of dissent against the campaign by the Legislature to wreck the economy through willful ignorance, calling on the government, as just about everyone else with an IQ greater than their shoe size has already done, to reject the proposed Security of Tenure Act (Senate Bill 1826) and Tito Sotto’s deranged “14th month pay” bill. In a statement last Friday, Philexport President Sergio Ortiz-Luis Jr. gave the two measures the organization’s official thumbs down, recommending instead that the government focus on providing more support for the country’s export sector and MSMEs. I f e n a c t e d , S B 1 8 2 6 “ wo u l d worsen the unemployment rate,” Ortiz-Luis said. The 14th month pay proposal, would “put us at a disadvantage especially against our fiercest competitors, the Asean
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Budget deficit hits P4.2B in June
cies should cut red tape and make their services more responsive and client-friendly. “Pag ‘di niyo ginawa ‘yan, papatayin ko kayo talaga. (If you will not do that, I will kill you),” Duterte warned. Also during his address, the President cited the importance of the Ease of Doing Business law, calling it “a landmark legislation that will improve service delivery and fight corruption.” Formally known as Republic Act
PSEi dips on players’ wait-and-see attitude
income tax and rationalize and improve fiscal incentives.” This bill seeks to reduce that tax from 30 percent to 20 percent in 10 years. Duterte also said Trabaho would also energize the country’s micro, small and medium enterprises and allow them to expand their business and hopefully generate 104 million jobs in the coming years. He also asked the legislature
SONA 2019
5 state agencies told: Improve services or die
THE stock market slipped on Monday as investors took a pause ahead of the State of the Nation Address (SONA) which came shortly after market close. The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.28 percent or 23.24 points to close at 8,246.83. The wider All Shares declined by 0.32 percent or 16.04 points to finish at 4,994.67. Regina Capital Development Corp. head of sales Luis Limlingan said market players were on a waitand-see mode for President Rodrigo Duterte’s 4th SONA, adding
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ASIAN STOCKS: t Shanghai 1.27% t Singapore 0.61% t Seoul 0.05% t Tokyo 0.23% t Jakarta 0.36% t Hong Kong 1.37% t Bangkok 0.43%
n President Rodrigo Duterte delivers his fourth State of the Nation Address at the Batasan Pambansa in Quezon City on Monday. AP PHOTO
PRESIDENT Rodrigo Duterte on Monday ordered five government agencies to improve their services, and threatened to terminate them if they fail to do so. During his fourth State of the Nation Address (SONA), Duterte identified these as the “LTO (Land Transportation Office), SSS ( Social Security System), BIR (Bureau of Internal Revenue), LRA (Land Registration Authority) and PagIBIG (Home Development Mutual Fund).” According to him, these agen-
t
CURRENCY RATE
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Here is a basic example: Let’s say a business has 10 employees who qualify for 14th month pay, thus in a one-year period the employer is paying for 120 months of labor. The 13th month bonus already adds 10 additional months of payroll costs, raising them an additional 8.33 percent above the base costs. Adding another month means that the employer will now pay 140 months of wages for 120 months of labor, a difference of 16.67 percent. Put another way, the employer is paying for the equivalent of 1.67 additional workers. Even though the implied directive of the 14th month pay proposal is that businesses should simply absorb the added costs and correspondingly reduce their profits, there is no direct requirement that they should, nor would any sensible business do so. Therefore in order to maintain costs, the business is left with only two options: It can
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HOW DO MINDFUL LEADERS MAKE ‘TOUGH’ DECISIONS?– MANAGING FOR SOCIETY BusinessB2
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