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Government starts second half with increased spending and revenues

By | Property News

STATE SPENDING picked up at a “decent” pace in July, turning around from a contraction in June and whittling down a year-to-date drop, according to data the Treasury bureau released on Friday that also showed the second straight month that the national government incurred a budget deficit.
State spending picked up by 3,43% to P339.4 billion in July from P328.1 billion a year ago, although primary expenditures — or net of interest payments — edged up by just 1.81% to P288.4 billion from P283.3 billion. Still, that was a turnaround from a 3.06% drop in primary expenditures, which include infrastructure disbursements, in June. Interest payments increased by 13.66% to P51 billion from P44.8 billion.
Revenues increased by 9.5% to P264.1 billion in July from P241.7 billion a year ago, fueled by an 8.81% rise in tax collections to P236.9 billion from P217.7 billion. The Bureau of Internal Revenue (BIR) accounted for 76.1% of tax collections and 68.27% of total revenues with P180.3 billion in July, 9.96% bigger than the year-ago P164 billion. The Bureau of Customs, which contributed 23.05% to tax collections and 20.67% of total revenues, increased its take by 4.79% to P56.6 billion from P52.1 billion. Other state revenue collectors grew take by 22.35% to P1.9 billion from P1.6 billion.
Non-tax revenues — mainly state subsidies to cover taxes on government transactions — increased by 13.15% to P27.2 billion from P24 billion, with Treasury collections rising by 22.14% to P14.4 billion from P11.8 billion. “The growth is driven mainly by higher income from national government (NG) deposits, investment from the Bond Singking Fund, guarantee fees and NG share from Philippine Amusement and Gaming Corp. income,” the Treasury said in a statement. Other non-tax revenues — including privatization proceeds as well as fees and charges — contributed P12.8 billion, 4.54% more than the year-ago P12.3 billion.
Revenue and expenditure performance resulted in a P75.3-billion fiscal deficit as of July that was 12.83% smaller than the P86.4 billion recorded in last year’s first seven months.
The government operated on a reenacted 2018 budget from January to April 15, when Mr. Duterte signed this year’s national budget into law four months late, but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion.
“The government begins the first month of the second half on the right foot, showing a decent pickup in expenditure 3.4% while revenue collection remained strong at 9.3%,” Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila Branch, told reporters in an e-mail.
“With the budget back online, government expenditures were up 23% from June and 3.4% up from the July 2018’s spending spree where NG spending was up 34%. With the administration looking to chase six percent growth for 2019, the July numbers mirror the stark drawdown in the funds parked with the BSP with the Treasury Single Account seeing a decrease of roughly P100 billion,” he added.
The economy grew by a disappointing 5.5% last semester against this year’s 6-7% goal, a performance blamed largely on the four-month delay in budget enactment that aggravated the impact of the 45-day public works ban ahead of the May 13 midterm polls.
“Government spending (or lack of it) was tagged as one of the culprits for the speed bump that the Philippines hit in first half and, so far, it looks like the government is hell bent on rolling out the funding to help nudge growth in the right direction. With the BSP easing policy (and projected to cut further) to revive investment, it looks like we will need a concerted effort to get second-half growth to 6.4%, good enough to carry the Philippines past the six percent finish line by year end.”
The seven months to July still saw the government spending 0.11% less at P1.93 trillion from P1.932 trillion a year ago, with primary spending still contracting by 1.32% to P1.699 trillion from P1.721 trillion and interest payments growing by 9.83% to P231 billion from P210.3 billion. The Treasury noted that state spending was still “being weighed down by the delayed approval of the 2019 budget, coupled with the election ban on new public works”.
For Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, Inc., “It is a consolation that spending in July is higher year-on-year.”
“However, the national treasury is right in saying that the budget implementation delay is still weighing down on government spending. We wish that this was not the case, but it is what it is,” Mr. Asuncion said in an e-mailed response to questions.
“On a positive note, it is just the first month of the third quarter and spending catch-up, I am sure, is rolling.”
Moody’s Investors Service — which earlier this month cut its Philippine economic growth projection further to 5.8% this year from the six percent it gave at the end of May and from the 6.2% in had penciled in February in the face of delayed budget enactment and the resulting disappointing 5.5% first-half expansion — said in an e-mail on Friday that “while the Philippines is not immune from the downturn in external trade, we view domestic factors as more important.”
“For example, the sharp deceleration in growth in the first half of the year was largely due to the delay in the budget; other countries in the region also saw their economies slow to a similar magnitude, but these were clearly more linked to the downturn in their export sector, said Christian de Guzman, senior vice-president of Moody’s Sovereign Risk Group.
“As such, the extent to which the government can execute its catch-up plan for budgetary disbursements, especially for infrastructure, will determine the extent to which fiscal expenditure can act as a buffer against external headwinds.”
Revenues increased by 9.64% to P1.812 trillion year-to-date from P1.652 trillion, with tax collections growing by 9.87% to P1.618 trillion from P1.472 trillion. The BIR collected 10.47% more at P1.247 trillion, compared to P1.129 trillion a year ago, while Customs grew collections by 7.88% to P357.7 billion from P331.5 billion. Other state tax collectors grew take by 8.58% to P13.5 billion from P12.4 billion.
Non-tax revenues grew 7.78% to P193.8 billion year-to-date from P179.8 billion the past year, with the Treasury contributing P102 billion that was 30.92% more than the year-ago P77.9 billion, while other offices saw collections cut by 9.91% to P91.8 billion from P191.9 billion.
The resulting fiscal balance was a P117.9-billion year-to-date deficit that was 57.79% smaller than the year-ago P279.4 billion. — Beatrice M. Laforga

Corporate regulator cracks down on ‘unfair debt collection practices’ by financing, lending firms

By | Property News

FINANCING AND LENDING companies that resort to “unfair” collection practices, including use of violence, face hefty fines or revocation of permit to operate under new rules issued by the Securities and Exchange Commission (SEC).
The SEC issued Memorandum Circular No. 18, Series of 2019 as it has been receiving complaints against financing companies (FCs) and lending companies (LCs) that harass borrowers and use abusive, unethical and unfair means to collect debts.
“[T]he Commission is aware of the practices of FCs and LCs of purposefully engaging the services of third party service providers (TPSPs) in their efforts to avoid liability for client harassment, by invoking the latter as a separate juridical personality,” the corporate watchdog said.
The commission enumerated acts that are classified as “unscrupulous and untoward” against borrowers and constitute unfair collection practices that are subject to penalties.
The SEC enumerated eight such practices, including use or threat of use of violence or other criminal means to physically harm people, their reputation or property. Also included is the use of threats to take any action that cannot legally be taken.
The SEC also included the use of obscenities, insults, or profane language the natural consequence of which is to abuse the borrower and/or which amount to a criminal act or offense under applicable laws.
Except when allowed by provisions of the circular, the disclosure or publication of the names and other personal information of borrowers who allegedly refuse to pay debts, is also classified as an unfair practice.
Other unfair practices include communicating or threatening to communicate to any person loan information, which is known — or which should be known — to be false, including the failure to communicate that the debt is being disputed, except as may be allowed under provisions of the circular.
So is the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a borrower; and making contact at unreasonable or inconvenient times or hours.
“Notwithstanding the borrower’s consent, contacting persons in the borrower’s contact list other than those who were named as guarantors or co-makers shall also constitute unfair debt collection practice,” the circular states.
For financing companies, the first and second offenses carry a fine of P50,000 and P100,000, respectively. The corresponding penalties for lending companies are P25,000 and P50,000.
For the third offense, the SEC may impose a fine of not less than twice the fine for the second offense but not more than P1 million, subject to the facts, circumstances and gravity of the case.
Third-time offenders also face suspension of their business activities for 60 days, or revocation of their certificate of authority to operate “as appropriate for each circumstance.”
Signed by SEC Chairman Emilio B. Aquino on Aug. 20, 2019, the circular was published on Friday and will take effect after 15 days. — V. V. Saulon

Palace says Sanchez unqualified for early release

By | Property News

Malacañang on Friday said former Calauan Mayor Antonio Sanchez, a convicted rapist and murderer, is ineligible for an early release.
“The inevitable conclusion is that all those convicted of a heinous crime, including Mr. Antonio Sanchez, would be ineligible and disqualified from availing the benefits of the good conduct time allowance,” presidential spokesman Salvador S. Panelo said in a statement.
The spokesman, who was the ex-mayor’s lawyer in the 1993 rape-slay case, earlier denied that he had anything to do with his planned release.
Mr. Sanchez was convicted of seven counts of rape with homicide and sentenced in 1995 to seven life terms for the rape and murder of two University of the Philippines students in 1993.
Justice Secretary Menardo I. Guevarra on Thursday said the Bureau of Corrections would evaluate the qualifications of Mr. Sanchez.
Early this week, he said the convict along with thousands of other inmates would be released for good conduct. Their release, he added, could not be appealed.
Several senators, including Senator Franklin M. Drilon opposed the plan and said they would investigate it. Mr. Drilon was the Justice secretary who prosecuted Mr. Sanchez back then.
Also on Friday, the Supreme Court said it had not ordered Mr. Sanchez’s early release.
The court earlier issued a ruling allowing a law that cuts the sentence on convicts with good conduct to apply to cases before it took effect.
In a statement, the tribunal said its decision was based on the judicial doctrine that laws should be applied retroactively when they favor the accused. — Charmaine A. Tadalan and Vann Marlo M. Villegas

Former DFA chief Yasay posts bail

By | Property News

FORMER Foreign Affairs Secretary Perfecto R. Yasay, Jr. got out of jail after posting a P240,000 bail over charges that he violated banking laws.
A Manila trial court has set his arraignment for Sept. 20.
Mr. Yasay, whom police arrested on Thursday, was brought to the hospital for high blood pressure hours after his arrest, according to his social media post. “Now the fight for justice and to prove my innocence begins,” he added.
Mr. Yasay, who briefly served as President Rodrigo R. Duterte’s top diplomat before lawmakers rejected his appointment in 2017, on Thursday posted a photo secretly taken by his wife while he was being processed for mugshots by Manila police.
The court ordered his arrest on charges that he conspired with five other officials of the shuttered Banco Filipino Savings and Mortgage Bank to get an anomalous loan worth P350 million for a company, according to a copy of a police report. They allegedly failed to report the loan to the central bank.
Mr. Yasay had said he would not post bail until he was brought to the judge where he would question “this abuse of process and travesty of justice.”
Mr. Yasay headed the Securities and Exchange Commission under then President Fidel V. Ramos. He ran for vice president in 2010 and lost. — Vann Marlo M. Villegas

Duterte to sign education science agreements during China visit

By | Property News

PRESIDENT Rodrigo R. Duterte is expected to close agreements on education, science and technology, and economic and social development during his China visit next week, the Department of Foreign Affairs (DFA) said.
Mr. Duterte is set to leave on Aug. 28 for his fifth visit to China, upon the invitation of Chinese President Xi Jinping. The visit runs until Sept. 1, a day earlier than initially planned.
“There are several agreements that are in the pipeline. Some of them are in the final stages of vetting but I cannot give you specific number. It pertains to education, science and technology, and… economic and social development. So those are the agreements,” Foreign Affairs Assistant Secretary Meynardo L.B. Montealegre said in a televised briefing in Malacañang Friday.
Mr. Montealegre, however, did not disussn whether the President will raise issues on the arbitral ruling over the West Philippine Sea in his meeting with his Chinese counterpart.
“That’s the President’s prerogative to discuss the particular issue. At the same time, he already made his pronouncement on this particular matter. So it’s the President’s call to discuss this specific issue,” he said. Mr Duterte earlier said he plans to invoke the July 2016 ruling that affirmed Philippine claims over the WPS.
The Palace earlier announced the trip will last until Sept. 2, but the DFA said the President will no longer visit Fujian province and instead fly back to the Philippines on Sept. 1.
Mr. Duterte will be meeting with Mr. Xi on Aug. 29. This will be his 8th bilateral meeting with the Chinese President.
On Aug. 30, he will be attending a business forum in Beijing, which will be led by the Department of Trade and Industry. He will then visit Guangzhou, where he will be joined by the Chinese Vice President Wang Qishan, in supporting the Philippine men’s basketball team competing at the FIBA World Cup..
“The President and Vice President Wang are expected to discuss ways to strengthen cooperation in anti-cooperation efforts, increase trade and investment and deepen the friendship between our countrymen and the people of Guangdong,” Mr. Montealegre also said.
Mr. Duterte had been due to visit Fujian province to inaugurate a building constructed in honor of his mother.
“Not in the schedule right now. It’s postponed to a more appropriate time,” Mr. Montealegre said. — Charmaine A. Tadalan

House starts crunching budget numbers

By | Property News

THE 18TH CONGRESS has begun hearings on the proposed P4.1-trillion national budget for 2020, with the House of Representatives targeting committee approval by Sept. 11 and final approval in plenary session by Oct. 4 before lawmakers take a month-long break.
The proposed spending plan for next year is 12% more than the P3.662-trillion 2019 budget and is 19.4% of gross domestic product (GDP), with planned infrastructure expenditure topping spending priorities at P972.5 billion, equivalent to 4.6% of GDP.
Top officials of the Development Budget Coordination Committee (DBCC) — made up of the Department of Budget and Management, National Economic and Development Authority, Department of Finance and the Bangko Sentral ng Pilipinas (BSP) — on Thursday briefed lawmakers on the proposed budget’s macroeconomic assumptions. The proposed budget is designed to propel overall economic expansion to a faster 6.5-7.5% in 2020 from a targeted 6-7% this year, with headline inflation supportive at a muted 2-4% after last year’s decade-high 5.2%.
Revenue collections are targeted at P3.573 trillion — about 16.9% of GDP — in order to help cover disbursements programmed at P4.21 trillion, equivalent to 19.9% of GDP. That will leave a P637.6-billion fiscal deficit equivalent to three percent of GDP.
Asked on the economic impact of another reenacted budget next year, Socioeconomic Planning Secretary Ernesto M. Pernia said GDP expansion could fall “probably below five percent,” recalling that in the nine years under former president Gloria M. Arroyo — who became House speaker in the last regular session of the 17th Congress that ended in June — that saw some national budgets reenacted, overall economic growth averaged just 4.6%.
Mr. Pernia said reenacting the budget again is “not going to be good because… government spending and even private spending on fixed capital formation will be hampered…”
Economic managers were also asked whether the proposed 2020 budget remains “cash-based” — a scheme started last year by former Budget chief and now Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno in order to ensure that state offices get only what they have proven they can spend within the fiscal year. The shift last year to that scheme led to a spat between the Budget department and the House, since it whittled down the proposed national budget for 2019 — an election year — to P3.757 trillion, compared to 2018’s P3.767 trillion. The spat left little time for the Senate to deliberate on the budget, and subsequent accusations by both legislative chambers that the other had made irregular fund insertions led to the four-month delay in national budget enactment.
House Speaker Alan Peter S. Cayetano had said in a press briefing on Tuesday that the House will be holding plenary sessions two hours later at 5 p.m. in order to give committees more time to work on the budget. The budget is supposed to be approved by the House first, but the Senate plans to hold parallel committee hearings — as practiced in the past — in order to speed up approval in that chamber.
The House Appropriations committee’s proposed budget calendar as of Aug. 14 — unchanged as of Thursday — targets committee approval on Sept. 11, second-reading approval on Sept. 20, third- and final-reading approval on Oct. 4, submission to the Senate on Oct. 8 and approval of the bicameral conference committee report on Dec. 9, in time for signing into law by President Rodrigo R. Duterte by Dec. 20.
The government operated on a reenacted 2018 budget from January to April 15, when Mr. Duterte signed this year’s national budget into law but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion.
The DBCC in its March 13 meeting slashed GDP expansion targets for this year (to 6-7% from 7-8% originally) and 2020 (to 6.5-7.5% also from 7-8%), citing constraints from the delayed enactment of the national budget.
Actual GDP expansion clocked in at a disappointing 5.5% last semester against this year’s 6-7% goal, a performance blamed largely on the four-month delay in budget enactment that aggravated the impact of the 45-day public works ban ahead of the May 13 midterm polls. — V. A. C. Ferreras

Manila slashes maximum realty tax hike by 20%

By | Property News

MANILA CITY Mayor Francisco “Isko” M. Domagoso has approved a local law that reduces by 20% the maximum increase in real property tax rates next year.
City Ordinance No. 8567, which cuts “incremental real property taxes due all classes of real properties,” takes effect on Jan. 1.
“… [T]here is a need to adopt a more progressive, equitable revenue system to help our taxpayers from [sic] the detrimental effects of economic downturn,” the ordinance read. “This may be achieved through a further reduction in the ceiling on the corresponding increase in the tax levy from 60% by 20% based on the incremental values of real properties under Ordinance No. 8330 (2014 General Revision of Real Property Assessments).”
Hence, the ordinance read, “any tax increase… shall be at the rate of 48%…” provided that “total amount of tax to be paid on land, buildings and other structures and machineries used for residential, commercial, industrial and special classes shall, in no case, be more than double the tax imposed in 2013 over the same real property.”
Mr. Moreno said on Aug. 9 that the ceiling will be cut further by 10% yearly till 2022.
“The City of Manila will lose about a billion pesos pero hindi… natalo ang Manila. Bakit? Nakinabang taga-Maynila (but Manila will not lose. Why? Because citizens of the city will benefit),” he said on Thursday.
RA 7160, or the Local Government Code of 1991, requires real property tax rate adjustments every three years. This requirement is largely ignored, as local officials are elected very three years as well. — Vann Marlo M. Villegas

Economic officials seek closer coordination with lawmakers on priority bills

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STATE economic managers have formalized the Executive branch’s request for closer coordination with the 18th Congress to speed up approval of President Rodrigo R. Duterte’s legislative priorities.
The Department of Finance (DoF), Department of Budget and Management (DBM) and the National Economic and Development Authority (NEDA) made the proposal in a joint letter to Senate President Vicente C. Sotto III and Speaker Alan Peter S. Cayetano.
“The DoF, DBM and NEDA look forward to working more closely with the 18th Congress, under your leadership, to better align the priorities of the legislature with the President’s development agenda,” a DoF statement on Thursday quoted the letter as saying. “This is to ensure that we can move our country forward and achieve our Ambisyon Natin 2040 objective of becoming a high-income country where poverty is eradicated.”
They proposed to hold regular informal or technical meetings of the Legislative-Executive Development Advisory Council (LEDAC).
The DoF said it has reorganized its office and assigned directors and staff tasked to regularly coordinate with Congress.
Economic managers noted in their statement that closer engagement with lawmakers should help ensure approval of more reforms that will bag for the Philippines more credit rating upgrades.
The Philippines on April 30 attained a higher investment-grade credit rating of “BBB+” from S&P Global, which the DoF attributed to key economic reforms such as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, estate tax amnesty, tobacco tax reform, rice trade liberalization, National ID System, as well as the ease of doing business and universal health care laws.
Attaining an “A” credit rating “means that the government, businesses and ordinary Filipinos can borrow more cheaply to invest, create jobs, and improve their lives,” the economic team also said.
The press release comes ahead of a LEDAC preparatory meeting on Aug. 27, during which the House of Representatives and the Senate are expected to harmonize their legislative agenda for the first regular session of the 18th Congress. The full council LEDAC, meanwhile, may convene in September after President Rodrigo R. Duterte’s visit to China.
Mr. Sotto on Aug. 5 said that the small LEDAC will convene monthly, while the full council will meet quarterly.
WISH LIST
Just last Wednesday, Cabinet Secretary Karlo Alexei B. Nograles said that Cabinet clusters have identified bills — targeted for approval in this session — that will increase competitiveness of the Philippines in Southeast Asia. The 18th Congress’ first regular session ends on June 5 next year.
The Cabinet’s proposed reforms include the Corporate Income Tax and Incentives Reform Act (CITIRA) that will reduce the corporate income tax rate gradually to 20% by 2029 from 30% currently and remove redundant fiscal incentives; as well as proposed amendments to Republic Act No. 7042, or the Foreign Investments Act of 1991, which will remove restrictions on foreigners from practicing their profession in the Philippines.
The Cabinet will also push amendments to the 82-year-old Commonwealth Act No. 146, or the Public Service Act, which will lift foreign ownership limits in utilities; and RA 8762, or the Retail Trade Liberalization Act, which will reduce the required minimum paid-up capital for foreign entrants to the country’s retail sector.
LEDAC, as provided by RA 7640, is chaired by the President and includes among its members the Vice-President, the Speaker, seven Cabinet members designated by the President, three senators designated by the Senate President, three members of the House designated by the Speaker, as well as a representative each from local government, the youth and the private sectors. It held its last meeting in September 2017, based on its Web site.
The small LEDAC, meanwhile, is composed of Senate President Sotto, Senate President Pro Tempore Ralph G. Recto, Majority Leader Juan Miguel F. Zubiri, Minority Leader Franklin M. Drilon and Finance committee chair Senator Juan Edgardo M. Angara, on the part of the Senate.The House will be represented by Speaker Cayetano (Taguig City 1st district), Deputy Speaker Luis Raymund F. Villafuerte (Camarines Sur 2nd district), Majority Leader Ferdinand Martin G. Romualdez (Leyte 1st district), Minority Leader Bienvenido M. Abante Jr. (Manila 6th district), Appropriations committee chair Isidro T. Ungab (Davao City 3rd district) and Ways and Means chair Jose Ma. Clemente S. Salceda (Albay 2nd district).
Mr. Salceda on August 5 said the House will prioritize the proposed increase in excise tax on alcohol products, Public Service Act amendments, establishment of the Department of Overseas Filipino Workers, proposed CITIRA, and establishment of Malasakit Centers; on top of the P4.1-trillion national budget for 2020. — Charmaine A. Tadalan

Experts caution as Duterte pushes shift to gross-based business income tax by 2022

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REUTERSPRESIDENT Rodrigo R. Duterte wants a shift to gross earnings as base for businesses’ income tax, but experts were cautious, saying such a base may make the tax simpler to enforce but unfair.
“You know what, I suggest to you — in all honesty — let us go to sa ating taxation gross. Maski sinong tanungin mo walang daya sa gross (Anyone will tell you it is more difficult to cheat when computations are based on gross revenues),” Mr. Duterte said in his speech on Wednesday night at the inauguration of the P550-million Tumingad Solar Power Project in Romblon.
“Pag mag-gross ka… nandiyan na lahat. Magkano ang binebenta mo? Magkanong kinita mo sa araw na ‘yan? Wala ‘yung minus na sweldo ng tao mo. Dito tayo sa gross (When you use gross revenues as base, everything is there. How much did you sell and earn in a day? No more deductions of your workers’ salaries. Let us shift to gross),” he added.
“Before I leave, gross tayo (Let us shift to gross earnings as base).”
Sought for comment, Albay 2nd District Rep. Joey S. Salceda, who heads the House of Representatives ways and means committee, said in a mobile phone message: “A flat tax on business looks tempting for its simplicity but is unfair to low-margin businesses and favors firms with high gross margins.”
“The next feasible option to a flat tax is tax on gross income earned. But even this may tilt against some that have high big indirect expenses on marketing and advertising,” he explained.
“Thus, the only way to do a flat tax is to use different rates per sector or industry, but that would be messy and would be an open arms, open legs invitation to lobbying in its most dysfunctional aspects,” he added.
“The current tax system is not perfect, but the way forward is to reduce tax rates, expand the tax base and run after tax cheats.”
For Alexander B. Cabrera, chairman and senior partner at PwC Philippines, the proposal could hit personal income tax collections since businesses will not have any incentive to report salaries.
“Pag ginawa mo ’yang taxation based on gross, lalo lang hindi magde-declare ’yung mga companies (If you shift to taxation based on gross, all the more that companies will not declare salaries),” Mr. Cabrera said by phone.
“Kailangan talaga ng deductions kasi maaring lugi ka, tapos pinababayad ka pa ng tax, so that’s confiscatory di ba? (You really need to make deductions because it would be confiscatory if you are taxed even if you are unprofitable, wouldn’t it?)” he added, saying it would increase cost of doing business especially for those just starting out.
He also said that it could make the Philippines less competitive, noting that “[s]o far, no ASEAN country is based on gross, all on net income.”
For Eleanore L. Roque, principal and head of Tax Advisory and Compliance Division at P&A Grant Thornton, “[t]he problem with putting gross taxation for corporations is that not all corporations have the same gross margin or net margin.”
“It’s doable, but you have to calibrate the rate, because some corporations would be earning income at a much higher… rate than others… so you cannot impose one tax rate on all types of corporations and then impose it on gross,” she explained.
And while the change could “probably make it easier for administrative purposes because you don’t have to check expenses anymore” it “may not be fair for most corporations because corporations are not created equal.” — Arjay L. Balinbin

Emirates wants more weekly flights from Manila

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EMIRATES is hoping to expand its flights to the Philippines. — COMPANY HANDOUTBy Arra B. Francia, Senior Reporter
DUBAI-BASED carrier Emirates Airline looks to add at least three more flights a week from Manila in the future, in a bid to further grow passenger volumes as its local operations nears full capacity.
The airline currently services 25 flights in the country, 18 of which depart from the Ninoy Aquino International Airport (NAIA). The rest are circular flights from Cebu and Clark.
“We have requested for at least three more flights a week. We would like to move to 21 (in Manila) as starters,” Emirates Country Manager for the Philippines Sathish Sethi said in a roundtable discussion in Taguig Thursday.
Mr. Sethi said Emirates carried more than one million passengers in and out of the Philippines in 2018 alone, 15% higher year on year. He added that seat load factor — the number of passengers on a flight divided by the number of available seats — is already around mid-90%.
“Our immediate request is for more frequencies. Our loads are pretty high. Our seat factors are running in mid-90s, a year-round average, which means little room for growth,” he said.
The growth in 2018 mostly came from the number of flights going to Dubai, given the large population of overseas Filipino workers in the area. Emirates also saw growth in the number of passengers heading to European destinations such as Portugal, Spain, and Italy via Dubai international airport.
Mr. Sethi said they are requesting to resume air services talks between the United Arab Emirates government and the Philippines in order to allow them to expand flights here.
“There are no commitments right now, but there are very healthy discussions going on with the entire Department of Transportation and CAB (Civil Aeronautics Board) have been very supportive of our operations,” Mr. Sethi said.
Emirates’ technical team is also talking with the DoTr and CAB to see what needs to be done at the NAIA so the gateway can accommodate its Airbus 380 (A380) aircraft.
The A380 is considered the largest commercial passenger aircraft in the world, as it can accommodate up to 500 passengers. Emirates first flew the A380 from Dubai to the Philippines in 2014 to test whether NAIA can service the jumbo jet.
“A380 has been the pillar of our fleet, we have a strong technical team that looks at all the safety standards. We have flown an A380 once here… It’s not impossible, but we understand that there are concerns over technical aspects,” Mr. Sethi said.
Without room for further expansion at its current capacity, Mr. Sethi said passenger volumes in the airline are unlikely to increase by a large percentage.
“It will have to be additional capacity. Not just for our growth…Our belief is that tourism cannot grow without growth in aviation,” Mr. Sethi said, citing how most tourists enter the country via flights because of its archipelagic nature.