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John Eduard Franco

QC realty tax hike suspension bags 1st OK

By | Property News

By Vann Marlo M. Villegas
A PROPOSAL to suspend until after 2019 implementation of the Quezon City (QC) ordinance that increases real property fair market values has secured committee approval, a senior local official said on Sunday.
Asked for updates on the measure, QC Council Majority Floor Leader Franz S. Pumaren said proposed Ordinance No. 20CC-497 was approved at the committee level on Nov. 14.
“It’s up for debate this Monday,” Mr. Pumaren said in a mobile phone message.
“It was approved in the three committees so the next step is… debate in the plenary,” he added, identifying the committees concerned as Ways and Means, Appropriations, as well as Laws, Rules and Internal Government which he heads.
Awaited is approval on second and third reading, which could happen a week apart, he added.
Mr. Pumaren had said in a press conference on Oct. 26 that the council — the city government’s lawmaking body — targets to approve the proposed ordinance on final reading before yearend.
The proposed local law seeks to suspend until after 2019 — a midterm election year — implementation of Quezon City Ordinance No. SP-2556, Series of 2016 which jacks up real property fair market values, which were last adjusted in December 1995 even if Republic Act No. 7160, or the Local Government Code of 1991, requires a review every three years.
Quezon City councilors filed the proposed ordinance following the Supreme Court’s Sept. 18 ruling lifting the April 2017 temporary restraining order against the realty fair market value hike.
The assailed local law increases the fair market values (FMV) of residential, commercial and industrial real properties by 400-733.33%, consequently raising tax payable by real property owners by 39-131%. New assessment rates, on the other hand, were cut to five percent for residential and 14% for commercial and industrial lands in order to cushion the FMV increases.
Proponents in the council of the suspension of the realty tax hike cited as reason for their move the multiyear-high monthly inflation rates that averaged 5.1% in the 10 months to October against the central bank’s 2-4% target range for full-year 2018.
They had noted that Malacañang itself, seeking to quell inflation expectations and cushion the public from already high prices of basic goods, has suspended a fresh oil excise tax hike that was scheduled to take place in January.
The city will have additional P700 million in revenues once the planned realty tax hike is implemented.
According to the latest available data from the Finance department’s Bureau of Local Government Finance, Quezon City was the biggest contributor to Metro Manila’s revenues last year with P15.161 billion of the P77.099-billion total revenues of the National Capital Region.
Real property tax is Quezon City’s second-biggest revenue tax source last year with P3.431 billion, following business tax with P9.204 billion.

Jakarta toughens rules on repatriating revenues from resource exports

By | Property News

JAKARTA — Indonesia’s government is tightening requirements to force companies to repatriate revenue from the export of natural resources, a minister said on Friday, as authorities seek to support a fragile rupiah currency.
Special accounts will be created for exporters to deposit export revenue at local banks to allow for better monitoring by the government, Darmin Nasution, coordinating minister for economic affairs, told reporters.
The new regulation due to take effect Jan. 1.
Companies would be barred from exporting if they do not repatriate earnings but would be allowed to keep earnings in dollars, though there would be tax incentives if they convert earnings to rupiah, he said.
Mr. Nasution said companies would be allowed to use the repatriated proceeds to fund imports or foreign debt payments.
“It is mandatory to repatriate the earnings and deposit them in the (banking) system. The earnings can still be used for the companies needs, but supporting documents must be provided,” he said.
“We have to formulate policies to give confidence to fund owners so that they will flow into the country, whether it is short-term capital inflow or foreign direct investment.”
Indonesia has required exporters to receive their earnings through onshore banks since 2012. Central bank data shows while 90% of such earnings already flow through local banks, only 15% of these funds are converted to rupiah.
The rupiah has strengthened 1.5% over the past two days, driven higher by Bank Indonesia’s surprise interest rate rise on Thursday and climbing off from levels not seen since the 1998 Asian Financial Crisis.
RELAXING INVESTMENT HURDLES
On Friday, the government also said it would relax foreign investment restrictions to help boost investment.
Mr. Nasution said 54 business sectors previously partially closed to foreign ownership would be opened for full foreign ownership. These included fabric printing, weaving, and certain dairy processing industries, Industry Minister Airlangga Hartarto said.
The policy package will also include the expansion of Indonesia’s tax holiday program. — Reuters

The terno: a symbol and icon

By | Property News

Ternocon’s winning designers in the formal category and their creations: (L-R) Maria Nenita Morden (silver) Marlon Tuazon (gold), and Michael Joseph Bawar (bronze).IN THE presence of less-polite company, the audience at the Cultural Center of the Philippines (CCP) last Sunday, Nov. 11, would have frothed at the mouth and would have fallen in a faint from sheer ecstasy at the sights and sounds at this year’s Ternocon.
As it was, however, the impeccably dressed crowd could do nothing but clap at the performance held at the Cultural Center of the Philippines (CCP) Main Theater’s stage. Both the runway and the audience were contained therein, showing fashion as performance, both on the clothes on the runway and the lives lived by those who chose to wear the terno.
The CCP collaborated with clothing conglomerate Bench for Ternocon, a project that aims to teach young and talented designers from all over the country the history and the technique of the terno — the national dress characterized by its butterfly sleeves. The project, the first stages of which began last year, finally culminated in the performance at the CCP.
The terno has ebbed and flowed in popularity, and in its seams lies our country’s history: while the style, drape and drop might seem Western, the smallest details (particularly the butterfly sleeves) show off a pride in the Philippine identity. It took off from the quasi-Victorian traje de mestiza that served as the Filipina gentlewoman’s dress, then evolved along with American fashions during the American Occupation.
It arguably reached its highest point during the Marcos dictatorship, when the strongman’s wife Imelda Marcos strutted across the world stage in terno, the peaked sleeves framing her face. After the Marcoses were fled into exile in 1986 for their various crimes, the terno faded in popularity, being seen only on select special occasions. It seems appropriate then, that the terno would be honored in a performance at the CCP, once the pride of Mrs. Marcos.
We call it a “performance” because aside from the fashion show that exhibited the winning gowns of the contestants (30 in all), the CCP incorporated various cultural performances throughout the show: for example, the first part of the show opened with a Subli by singers from Batangas — it’s quite hard to describe, but there’s a crucifix, and an offertory dance in there. Other highlights included serenades from a male ensemble, where, as they crooned songs in Tagalog, capiz chandeliers were gracefully dropped lower, closer to the runway, lending it a softer, more romantic glow.
The winners in the Balintawak category were (L-R) Santi Obcena (bronze), Marlon Tuazon (gold), and Dan Ryan Duran (silver).The first part showed off the designs of the Ternocon contestants for the balintawak, here loosely defined as a cocktail-length terno, which included a blue one made almost entirely of peacock feathers. The winners for this category were: Santi Obcena with a bronze medal, silver for Dan Ryan Duran, and a gold for Marlon Tuazon.
The formal ternos were shown off, a favorite was a white creation with sheer overlay and floor-sweeping sleeves; with the whole thing studded in pearls. It won a gold, and was designed by the gold medalist from the Balintawak category, Marlon Tuazon, giving Mr. Tuazon a clean sweep that evening. The other winners were Maria Nenita Morden with silver, and Michael Joseph Bawar with bronze.
Ternocon would not have happened without the help of the fashion designers who were assigned as mentors for the project: Inno Sotto, JC Buendia, Cary Santiago, and Len Cabili. Their presentations were also a highlight: for example, Cary Santiago presented a collection with ternos shaped with birds either in a more modest pose or with wings outstretched, forming bodices and skirts. Mr. Sotto, meanwhile, dominated the seats at the theater with designs inspired by great and late Filipinas (socialite Imelda Ongsiako Cojuangco, for example). His flamboyant designs were made to hover on the theater’s most expensive seats closest to the stage. The models weren’t to be ignored either: while pretty young things pranced on the runway, supermodels from fashion shows past usually wore the final dresses in each segment, showing a grace and movement no longer seen on runways — or most venues, for that matter.
Meeting Mr. Tuazon on the stairs of the CCP Lobby, we asked him what he learned from Ternocon. Technique, of course, but then: “I already admired the terno, but now, the love of Philippine culture is buong-buo (whole and intact).”
A symbol serves as more than a visual reminder and a summary of things. It serves as a rallying call as well for people who share an identity. Said Bench Founder and Suyen Corp. chair Ben Chan in a speech, “The terno is not just a garment: it is a symbol and icon; it is an art.”
And that, ladies and gentlemen, is why the terno is important. — Joseph L. Garcia

From the Front Page: FDI down, interest rates raised anew

By | Property News

Analysts opened the week split on whether or not the central bank would further raise interest rates to arrest the momentum of soaring inflation. While recent policy tightening has proved effective so far, a pause could “afford the economy some space to regain its breath and sustain above-6 percent growth into the medium term.”
The monetary board ultimately opted to raise policy rates by 25 basis points (a cumulative 175 basis points this year). The key policy rate is now at 4.75 percent, the highest since March 2009. BSP Deputy Governor Ma. Almasara Cyd N. Tuaño-Amador said this was a proactive move by the central bank to temper inflation risks amid tighter global financial conditions.
Net foreign direct investments (FDI) slipped to $752 million in August, the smallest inflow recorded since March’s $697 million. FDIs infuse capital into the economy, supporting business expansion, generating more jobs and buoying consumer spending. Analysts, however, believe this slide to be temporary, with the BSP asserting that data shows “continued favorable investor sentiment in the Philippine economy.”
Malacañang approved the proposed suspension of next January’s fuel excise tax hike in the wake of Dubai’s crude price levels hitting $80/bbl on Sept. 26. The Finance department has estimated that the tax hike suspension will cost the government P41 billion in forgone revenues, while the central bank expects it could shave 0.2 percentage point off full-year inflation.
The nation is one step closer to breaking up its telco duopoly, as the selection committee for the third major telecommunications service provider denied the motions for reconsideration of the two groups disqualified from last week’s auction. This leaves Mislatel, formed by China Telecommunications Corp., Dennis A. Uy’s Udenna Corp. and its subsidiary, the likely winner.

Environment dep’t affirms, eases miners’ sanctions

By | Property News

PHILSTARTHE DEPARTMENT of Environment and Natural Resources (DENR) has affirmed its decision to close two mining projects and reject the application for a permit of another that are among the 13 that appealed to DENR sanctions announced in February last year.
While most of the others had faced permit cancellation, they now face suspension.
“The cancellation of Mineral Production Sharing Agreements (MPSA) of Claver Mineral Development Corp. and Oriental Synergy Mining Corp. was affirmed,” according to the DENR statement, referring to a Nov. 12 resolution issued by Environment Secretary Roy A. Cimatu, adding that “the denial of the MPSA of Ore Asia Mining and Development Corp. was also affirmed.”
Except for Berong Nickel Corp. whose suspension order was lifted but subject to corrective measures, the remaining nine miners were disallowed from transporting their ores until they fully rehabilitate their mines. These are: Zambales Diversified Metals Corp.; Krominco, Inc.; Mt. Sinai Exploration and Development Corp.; Libjo Mining Corp.; Wellex Mining Corp. mines 1 and 2; Carrascal Nickel Corp.; AAMPHIL Natural Resources Exploration and Development Corp.; Strong Built Mining Development Corp. and Emir Mineral Resources Corp.
“On top of the payment of fines and penalties, these companies were directed to undertake corrective measures within a timetable,” DENR said in its statement.
“Failure to implement these measures will result in reinstatement of the cancellation order previously issued to these companies,” it added.
“The resolutions directed immediate and complete payment of all fines and penalties for the violations committed by these companies. DENR also ordered that no transport of ore shall be allowed until full rehabilitation is undertaking undertaken by these mining companies.”
The miners concerned may still appeal to the Office of the President.
“The earlier they can have an action plan and implement it, the earlier we can monitor them to see if the suspension will be lifted,” DENR spokesman Jonas R. Leones said in a phone interview on Friday.
The review since last year of the Mining Industry Coordinating Council (MICC) covered 19 nickel mines, three gold and copper mines, three chromite mines and two magnetite/iron mines. That review assessed their performance according to legal, technical, environmental, social and economic parameters. The MICC drew up a score card to determine the acceptability of these mines. Scores range from 0 to 3, with 1.5 as the passing threshold per parameter.
Four mines scored below 1.5 in the legal field, four in technical, eight in environmental, 12 in social and only two in the economic parameter.
“The report generally showed that, for the majority of mining companies, improvements in technical and environmental management practices need to continue and scale up,” according to DENR’s press release.
“It should be noted that the report also acknowledged that there had been efforts by at least half of the companies to rectify and correct inappropriate practices.” — Janina C. Lim

October sees smaller hot money net outflow

By | Property News

BW FILE PHOTOFOREIGN PORTFOLIO investments continued to leave the Philippines in October, although the net outflow that month was far less than a year ago and in September, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
In a statement, the central bank said that these investments — called hot money for the ease by which they enter and leave markets –resulted in $67.84-million net outflows in October, 87.96% less than the $563.42-million net outflows in the same month last year.
October marked the second consecutive month of net outflows.
October’s net outflow was also 84.59% less than September’s $440.3 million.
“The deficit may be attributed to investors’ reaction to the country’s September inflation data coupled with the continuing trade tensions between the US and China,” the BSP said.
Prices of widely used goods that month climbed by a nine-year-high 6.7% in September, a pace sustained in October.
Gross investment inflows declined 30.97% to $952.60 million in October from $1.38 billion in the same month in 2017. But they were up 28.16% from September’s $743.31 million.
Outflows totalled some $1.02 billion in October, 47.69% lower from $1.95 billion in October 2017 and 13.56% less than September’s $1.18 million.
“The US continued to be the main destination of outflows, receiving 77.7% of total remittances,” the BSP said.
Top hot money sources for the month were the United Kingdom, United States, Singapore, Norway, and Luxembourg, accounting for 82.4% of the total pie, the BSP said.
About 68.8% of investments that month went to securities listed on the stock exchange — particularly to holding firms, food, beverage and tobacco firms, banks, property companies, and telecommunication companies — logging net outflows of $301 million.
The remaining 31.2% went to government securities and peso time deposits, which posted net inflows of $233 million and less than $1 million, respectively.
There were also net outflows from other peso debt instruments of less than $1 million.
“Year-to-date transactions (1 Jan to 2 November 2018) yielded net inflows of $94 million compared to the $812-million net outflows for the same period last year (2 January to 3 November 2017), which is attributed to a large investment in a holding company registered this year,” the BSP said.
The central bank expects hot money to record a $900-million net outflow by yearend. — E. J. C. Tubayan

NEDA official downplays inflation impact of election spending

By | Property News

INFLATIONARY PRESSURES from election-related spending in 2019 will likely be muted, the National Economic and Development Authority (NEDA) said.
“It’s what we would call some sort of just a mid-term elections so we don’t see much by way of spending kasi hindi naman siya (because they are not) national elections,” NEDA Undersecretary Rosemarie G. Edillon said in an interview on the sidelines of a forum organized by the Center for Philippines Futuristics Studies and Management Inc. in Makati on Friday when asked how inflation would move amid election-related spending in 2019.
“Historically, not so much (inflationary impact). In fact, the uptick is also spread across three quarters,” she added.
Ms. Edillon said that campaigning spending does not have a broad-based impact on prices, explaining: “Kasi nakikita naman namin ‘yung uptick only in certain industries like paper, printing, and transport.”
The Bangko Sentral ng Pilipinas now expects inflation to settle at 3.5% in 2019 from an initial 4.3% forecast. Inflation averaged 5.1% in the 10 months to October against the central bank’s 2-4% full-year target range for 2018.
The government is banking on the impending enactment of a law that will shift the rice trading system — from one with import restrictions to one that liberalizes private sector importation — in order to ease food inflation pressures. That law is expected to slash retail prices of the staple by P7 per kilogram and shave 0.7 percentage point off headline inflation.
In the same forum, Roberto F. De Ocampo, chairman of the Center for Philippine Futuristics Studies and Management, Inc. and a former Finance secretary in the administration of Fidel V. Ramos, had a different view.
“The 2019 inflation would likely increase in anticipation of the local and national elections and the continuing increase in the global prices,” said the former Finance chief, noting that the polls would hep fuel economic growth as well.
The mid-term polls is set on May 13, 2019. The campaign period for senatorial candidates and party-list groups is scheduled from February 12 to May 11, next year, while the campaign period for district representatives, governors, councilors is scheduled on March 29 to May 11, 2019.
A 2010 NEDA study showed that election-related spending contributes an average 0.34 percentage points to gross domestic product (GDP) growth.
Moreover, Mr. De Ocampo forecasted a 6.6-6.8% economic growth for 2019, lower than the government’s 7-8% target, but still strong as it is boosted by public investment from the government’s infrastructure program, as well as robust domestic demand supported by overseas remittances.
“The Philippines will continue to be one of the strongest economies in Asia next year. The economy will gain from the government’s ‘Build, Build, Build’ infrastructure program with the rise of our infrastructure spending,” said Mr. De Ocampo.
“Remittances from overseas Filipinos will still be a major driver of the country’s domestic demand. This will be supported by the increase of investment inflows and our demographic sweet spot and dividend advantages in our labor sector.”
Mr. De Ocampo also flagged external uncertainties caused by the US-China trade war, global monetary policy tightening and uncertainty over the United Kingdom’s exit from the European Union.
“Right now the global situation is more confusing and unstable than the domestic one,” he said. — Elijah Joseph C. Tubayan

Sandiganbayan restores bail for Imelda Marcos

By | Property News

PHILSTARBy Charmaine A. Tadalan, Reporter
THE Sandiganbayan’s fifth division on Friday allowed Ilocos Norte-2nd district Rep. Imelda R. Marcos to post bail anew pending resolution of her motion for leave.
“We will order her to post bonds in the same amount of the forfeited bonds,” Associate Justice Rafael R. Lagos said, noting Mrs. Marcos should remain within the premises until the bonds posted amounting to P150,000 have been approved.
The former First Lady was released from the custody of the Court around 11:30 a.m. upon approval of her bail.
The anti-graft Court was acting on the motion for leave of court to avail of post conviction remedies, which the camp of Mrs. Marcos filed on Nov. 12.
In the said motion, it was explained Mrs. Marcos failed to attend the promulgation on Nov. 9 “solely because she was indisposed.”
It was also noted that the accused suffers from the following medical condition: Diabetes Mellitus Type 2; Hypertension and atherosclerotic cardiovascular disease; Status mini strokes; Sensorial hearing loss; Chronic recurrent urinary tract infection; Chronic recurrent gastritis and multiple colon polyps and Recurrent respiratory tract infection.
Mrs. Marcos, however, also told the court the real reason for her absence was because she was unaware of the promulgation date.
“If I knew about it, I would have been here, even if I was sick, I would have been here,” Mrs. Marcos said, adding she learned about her conviction on the TV news.
On the matter of her attending the birthday party of her daughter Ilocos Norte Gov. Imee R. Marcos, she said she went there at her daughter’s pleading.
She explained further the notice of promulgation was sent to her residence, but was left in the office of her secretary who had been on leave for about a month.
“It turns out that an envelope from the Court was received by my cook and she placed the same in the room of my secretary, Shirley Torio. Unfortunately, Ms. Torio was not with me that week because she had to return to the province to attend the funeral of her aunt,” Mrs. Marcos said in her affidavit, submitted to the Court on Thursday afternoon.
Mrs. Marcos on Nov. 9 was convicted of seven counts of graft in connection with $200 million in public funds transferred to Swiss foundations during the rule of her husband, the late dictator Ferdinand E. Marcos
Opposition lawmakers slammed the Sandiganbayan order restoring bail for Mrs. Marcos.
“Very double standard! Very shameful of the high magistrates of the Sandiganbayan bowing down to the high and mighty Marcoses for the whole world to see. Very disappointing! As if the delay of more than two decades in deciding the case was not enough injustice,” Anakpawis Rep. Ariel B. Casilao said in a phone message to reporters.

BSP raises rates in ‘proactive’ move

By | Property News

By Melissa Luz T. LopezSenior Reporter
THE CENTRAL BANK fired off a softer rate increase yesterday as policy makers saw the need for preemptive action amid global uncertainty, and as price expectations remain elevated back home.
The Monetary Board raised policy rates by 25 basis points (bp) on Thursday, marking the fifth consecutive tightening move this year. This followed back-to-back 50bp increases in August and September and two 25bp increases in May and June, worth a total of 175 bps.
Benchmark rates now range from 4.25-5.25% effective today. The key policy rate is now at 4.75%, the highest since March 2009.
“[T]he Monetary Board decided to raise the policy rate by 25 basis points given the upside risks to the inflation outlook and given that inflation expectations have remained elevated as supply-side and possible wage pressures continue to drive price developments,” BSP Deputy Governor Ma. Almasara Cyd N. Tuaño-Amador said in a press briefing.
A BusinessWorld poll of economists last week resulted in a toss-up, with six betting the BSP will keep rates steady and five seeing a good chance for a 25bp hike.
Inflation steadied at 6.7% in October, matching September’s print which was a nine-year high. Still, it ended a steady rise in consumer prices seen since the start of the year. Food prices posted a slower year-on-year increase last month, with economic managers noting that state interventions to boost food supply have started to take effect.
Month-on-month inflation likewise eased to 0.3% coming from 0.9% logged in September.
Last week, BSP Governor Nestor A. Espenilla, Jr. said the October print affirms their view that price pressures are “finally moderating,” while Deputy Governor Chuchi G. Fonacier noted there is room for the central bank to stay on hold as prices of goods have been easing even in early November.
‘PROACTIVE’
“The Monetary Board deemed it necessary to respond with proactive policy action to help temper the risks to the inflation outlook, including those emanating from the continued uncertainty in the external environment amid tighter global financial conditions and trade tensions among major economies,” Ms. Tuaño-Amador said yesterday, adding that the central bank’s decision already factors in an expected rate hike in the United States.
Economists who noted the need for another hike said the move is necessary to further cool inflation expectations and ensure that local yields will remain competitive even after the US Federal Reserve raises rates anew in December.
Others, however, were concerned about how rapid inflation and rising interest rates could further dampen economic growth, which settled at a three-year low of 6.1% during the third quarter.
Monetary policy makers also said they found it appropriate to tighten rates further despite a slower-than-expected economic growth, as the above-six percent rate shows the economy stands “resilient and robust” despite rising borrowing costs. Loan growth continues to be healthy and supportive of expansion, Ms. Tuaño-Amador said.
Alex Holmes, Asia economist at Capital Economics, said the BSP’s latest rate hike may be the last this year “with inflation set to fall back over the coming months.”
SLOWER INFLATION AHEAD
The central bank said they now expect inflation to clock in slower in the coming months, with price increases seen to settle below four percent over the next two years with latest measures seen to bring costs down.
Dennis D. Lapid, director of the BSP’s Department of Economic Research, said inflation is expected to settle at 5.3% this year, higher than the 5.2% expected previously due to the recently-announced increase in transport fares for public jeepneys and buses, as well as recent movements in global oil prices.
“The latest view is we’re looking at a deceleration in inflation,” Mr. Lapid said.
Inflation averaged 5.1% from January-October, well above the 2-4% target band for 2018.
By next year, inflation is expected to settle at 3.5%, back within target and lower than the 4.3% previous estimate. In 2020, prices are seen to rise by 3.3% from 3.2%.
The “substantial” reduction in the forecasts factor in the recent approval of the rice tariffication bill, which is nearing enactment after clearing the Senate on Wednesday. Authorities said this could reduce inflation by 0.7% in 2019 as the increased supply of the crop will bring down rice prices by as much as P7 per kilogram.
Ms. Tuaño-Amador added that the revised forecast also takes into account the suspension of the additional P2 per liter increase in fuel excise tax approved by President Rodrigo R. Duterte recently. These are now factored into the outlook given the “considerable degree of certainty” of their implementation.
Central bank officials also noted that non-monetary measures introduced by the Executive are starting to be felt, as greater food supply is seen to alleviate price pressures. Inflation has been food-driven as of late, according to the Philippine Statistics Authority.
Ms. Tuaño-Amador added that these interventions are expected to have a “very positive impact” on consumer sentiment and behavior. “The efficacy of the non-monetary measures will get some traction as we see the implementation of these programs.”
“It’s also important to understand that these non-monetary measures also can impact on sentiment and consumer behavior. Once you are able to rein in inflation expectations, then price and wage setters will be restrained in demanding higher prices,” she added.
The BSP will hold its final rate-setting meeting for this year on Dec. 13.