Gov’t loses P144 B in 2011 due to tax perks in ecozones

By Zinnia B. Dela Peña (The Philippine Star) | Updated March 27, 2014 - 12:00am

MANILA, Philippines - The government lost at least P144 billion from the income tax holidays enjoyed by domestic and foreign firms in free ports or economic zones in 2011, the Department of Finance said.

The amount accounted for 1.5 percent of gross domestic product (GDP), 9.3 percent of government’s total expenditures and 10.6 percent of state revenues in 2011.

These figures, the Finance Department said, were conservative as the Tax Expenditure Report covered only 29 percent of all investment promotion agency – registered firms.
“With the current tax incentives system that has been largely unaccounted and uncoordinated, the government loses billions of pesos in revenues every year which could have helped improve our fiscal position,” Finance Secretary Cesar Purisima said as he urged lawmakers to speed up the approval of key economic reforms particularly the fiscal incentives rationalization bill that has been pending for more than 15 years.

The bill, which has been certified a priority measure by the Aquino administration, aims to establish a transparent and accountable system for the grant of incentives.

It seeks to remove various incentives granted to businesses that are deemed either excessive or no longer necessary as the government aims to achieve sustainable inclusive growth.

 

Internal Revenue commissioner Kim Henares earlier said the government would generate as much as P19 billion in additional revenues with the rationalization of tax breaks.

Purisima is also pushing for the immediate passage of the Tax Incentives Management and Transparency Act (TIMTA) and the Fiscal Incentives Rationalization Reform (FIR) bill.

The TIMTA will give the government the necessary tools to account for the magnitude of government support given to a certain sector and the appropriateness of using tax incentives in achieving socioeconomic goals while the FIR coordinates and organizes the grant of incentives to different sectors that has been largely unfettered over the last few years.

“Tax incentives distort the tax structure of the Philippine economy. Through these twin fiscal incentives reform measures, in the long term the government will enhance the country’s fiscal capacity to continue to build on its macroeconomic fundamentals, level the playing field and improve competitiveness and investment opportunities. Accounting for tax incentives needs to be transparent, and these tax incentives need to be granted properly,” Purisima said.

Visually impaired Pinoys to hit over 2 M this year – study

By Sheila Crisostomo (The Philippine Star) | Updated March 26, 2014 - 12:00am

 

MANILA, Philippines - More than two million Filipinos are projected to develop visual impairment this year due to various reasons, ranging from chronic illnesses to aging, an expert from the Philippine Academy of Opthalmology (PAO) said yesterday.

In a press briefing, PAO member Carlos Emmanuel Chua noted that based on research of the Sentro Oftalmologico Jose Rizal of the Philippine General Hospital in 2012 and 2013, around 2.4 million individuals will be visually impaired this year.

Of this figure, 312,000 individuals will go blind due to cataract, refractive error, glaucoma and diabetes.

Chua also noted that the top causes of visual impairment include error of refraction, cataract, glaucoma, retinopathy and maculopathies, particularly diabetes and hypertension.

“Poorly controlled diabetes mellitus is estimated to blind 40,419 individuals in 2014 and cause visual impairment in around 151,570 individuals,” said Chua, an adult and pediatric ophthalmologist at the St. Luke’s Medical Center (SLMC).

According to Pearl Tamesis-Villalon, former PAO president and SLMC Quezon City-Retina Section head, it is important to manage diabetes to prevent the development of diabetic retinopathy.

 

“It is one of the many complications of diabetes. It primarily affects retinal microvasculature, destroying its walls (causing) fluid leakage and accumulation in retinal tissue causing edema,” Villalon explained.

She also noted that the Philippines has the ninth largest diabetic population in the world, affecting some 7.8 million Filipinos by 2030.

Age-related macular degeneration (AMD) is the leading cause of permanent visual impairment or severe vision loss in people above 50 in western countries, she added.

Age is the most important risk factor, followed by modifiable risk factors like lack of antioxidant, smoking, excessive ultra violet exposure and systemic conditions such as high cholesterol and obesity.
Prevalence is higher among Europeans at 12.3 percent against Asians at 7.4 percent.

“But numbers are expected to rise sharply in Asia as the region comprises 60 percent of the world population,” Villalon added.

To enhance diagnosis and treatment of blindness-causing eye diseases, the Eye Institute of SLMC inked yesterday a memorandum of agreement with Novartis Healthcare Philippines.

Under the agreement, Novartis will provide free Optical Coherence Tomography (OCT) to 360 qualified patients of SLMC Eye Institute in Quezon City and Global City from Jan. 1 to Dec. 31 this year.

To qualify, a patient should be currently on the Novartis medication Ranibizumab, which is indicated for the treatment of neovascular or wet AMD, a visual impairment due to diabetic macular edema and macular edema secondary to retinal vein occlusion.

According to SLMC-Global City Eye Institute head Noel Chua, “OCT is a non-invasive imaging test that uses light waves to take cross-section pictures of your retina, the light-sensitive tissue lining the back of the eye.”

 “It enables the ophthalmologist to map and measure the thickness of each of the retina’s distinctive layers. These measurements help with the early detection, diagnosis and treatment guidance for retinal conditions and diseases,” Chua added.

553,706 college students to graduate

By Helen Flores (The Philippine Star) | Updated March 26, 2014 - 12:00am

 

MANILA, Philippines - Over half a million graduates will be added to the labor force this year, the Commission on Higher Education (CHED) reported yesterday.

Data from CHED show that 553,706 college students will graduate this school year.
Topping the list are graduates of Business Administration and related courses (142,061), followed by Medical and Allied disciplines (110,280), Information Technology (68,178), Education and Teacher Training (65,092), Engineering and Technology (61,786) and other disciplines (26,298).

A total of 18,725 are graduates of Maritime followed by Social and Behavioral Science (13,144); Agriculture, Forestry, Fisheries and Veterinary Medicine (9,109); Service Trades (8,283); Mass Communication and Documentation (6,153); Humanities (5,362); Natural Science (4,171); and Law and Jurisprudence (2,870).

Graduates of Architectural and Town Planning number 2,268 followed by Mathematics majors (2,094), general courses (1,863), Religion and Theology (1,280) and Trade, Craft and Industrial (403).

‘Entrepreneurship solution to joblessness’

 

Following reports on joblessness, Sen. Paolo Benigno Aquino IV said yesterday that youth entrepreneurship is the key to addressing unemployment for the 15- to 24-year-old segment, the number of whom continues to rise annually.

The Senate is in the process of studying several bills on youth entrepreneurship to help address the problem of unemployed youth.

But “with the slow pace of the country’s legislative mill, it will take months or years before these measures are enacted into law. That’s why the government needs to take the initiative and start these programs right away,” Aquino said.

Aquino believes that the government’s push for inclusive growth will not take off unless the problems of youth unemployment and underemployment are immediately addressed.– With Marvin Sy

Gov’t launches health program for 14.7 M poor families

By Delon Porcalla (The Philippine Star) | Updated March 25, 2014 - 12:00am

MANILA, Philippines - The government launched yesterday a comprehensive health program aimed at providing primary healthcare to 14.7 million indigent families.

President Aquino, along with officials of the Philippine Health Insurance Corp. (PhilHealth) and the Department of Health (DOH), led the launching of a multi-sectoral advocacy campaign dubbed “Alaga ka para sa Maayos na Buhay” (Alaga Ka) at the Quezon City Memorial Circle.

In his speech, Aquino invited the attendees – some 2,000 poor families from different parts of Metro Manila – to partake of and utilize the benefits offered by Alaga Ka.

“It is the primary objective of the Alaga Ka program to open the eyes of our fellowmen, especially the 14.7 million indigent families, about the services being offered by our very own DOH and PhilHealth,” Aquino said.

The beneficiaries will receive micronutrient supplements, maternal and neonatal care package and family planning.

They will also get free treatment package for tuberculosis from government hospitals.

 

“The services here are crystal clear: We firmly believe that prevention is better than cure. Instead of being content with curing the illness, we are giving Filipinos the capacity to prevent illnesses and stop it from spreading further,” Aquino said.

The President was joined by Health Secretary Enrique Ona, PhilHealth president and CEO Alexander Padilla, Education Secretary Armin Luistro and Quezon City Mayor Herbert Bautista.

Aquino said PhilHealth and other government agencies providing health services have been able to keep up with the demand for universal health care because of proper management of the government’s resources.

“Among the benefits that are included in this service are health-risk counseling and cancer screening, and the assurance that beneficiary-families will be able to consult and see a doctor every year,” he said.
He added that even the legislative branch pitched in and helped by passing the Sin Tax Reform and Responsible Parenthood laws that greatly helped in providing better and more expanded health services to the people.

The most popular Filipino in world history

Earlier this month, the Pantheon project website of the Massachusetts Institute of Technology’s Media Lab went live. Pantheon, or at least its first version, is an impressive but necessarily incomplete attempt to measure “the global popularity of historical characters” (this and other project-descriptive quotes are from the Methods section of the website). It uses two measures.

By the “sophisticated” measure Pantheon calls the Historical Popularity Index (HPI), the most popular person in history is the great philosopher Aristotle, followed closely by his famous teacher Plato. Jesus Christ only comes third—allowing the New York Times Magazine to reference John Lennon’s infamous quote in its story on Pantheon: “Who’s More Famous than Jesus?”

But who are the most popular Filipinos according to Pantheon?

Finding the answer is a simple matter of clicking on the right links. A word, however, about the limitations of the Pantheon project.

The MIT Media Lab’s Macro Connections group made four crucial assumptions when it developed the project. First, Pantheon would focus on “cultural production,” not culture understood in its broad sense of information. Second, it would use “biographies of notable historical characters” as proxy for cultural production. Third, it would narrow the project’s scope to global culture, “meaning the subset of cultural production that has broken the barriers of space, time and language.” And fourth, the main source for the biographies of globally notable historical characters would be Wikipedia. Or, to be more specific: “The Pantheon 1.0 data was curated by the creators of Pantheon and gathers information on the 11,340 biographies that have presence in more than 25 languages in the Wikipedia (as of May 2013).” (Another data source is Charles Murray’s “Human Achievement: The Pursuit of Excellence in the Arts and Sciences, 800BC to 1950.”)

The first measure of historical popularity is simple enough: “The simpler of the two measures, which we denote as L, is the number of different Wikipedia language editions that have an article about a historical character.”

By this measure, Cory Aquino is the most popular of the 18 Filipinos who meet the threshold criterion of presence in more than 25 Wikipedia editions, with 76. (Eight of these editions are in various Philippine languages, such as Kapampangan and Tagalog; the rest are in foreign languages such as Catala and Svenska, and in English of course.)

Gloria Arroyo is a distant second, with 60. (The same eight Philippine editions carry her biographical entry. She is in at least one Wikipedia edition where Cory is not: Afrikaans.)

To correct for certain basic and inherent biases, Pantheon also uses the HPI measure. “The most sophisticated measure, which we name the Historical Popularity Index (HPI) corrects L by adding information on the age of the historical character—as a proxy for breaking the barrier of time-the concentration of PageViews among different languages—to discount characters with PageViews mostly in a few languages—the coefficient of variation in PageViews—to discount characters that have short periods of popularity—and the number of non-english Wikipedia pageviews—to reduce any English bias even further.”

By this second measure, Ferdinand Marcos is the most popular Filipino, with an HPI of 24.424, followed by Jose Rizal, with an HPI of 24.018. 

Marcos has 53 Wikipedia editions to his name, while Rizal (classified by Pantheon under the anodyne term “social activist”) has 51. Lapu-Lapu, classified like 13 other Filipinos in the list as “politician,” has an HPI of 23.509, with 28 Wikipedia editions.

What does this all mean?

The Pantheon website, at pantheon.media.mit.edu, opens with a stark reminder to its visitors that “Small differences in ranking (i.e., who is first, second or tenth) are not statistically meaningful and should not be used to draw strong conclusions about the popularity of similarly ranked individuals,” and that “Individuals are mapped to their places of birth according to present-day national boundaries, not national identities.”

The second reminder explains why Lapu-Lapu, who would likely be horrified if he heard himself being referred to by a Spanish king’s name, is classified as Filipino—and why Austria claims the dubious honor of hosting Adolf Hitler as its most popular native son. (Hitler also comes second among the 2,529 politicians included in Pantheon, next only to Julius Caesar.)

The first reminder suggests that patterns in ranking, not who came in “first, second or tenth”), may provide the better source of meaning.

Of the 18 Filipinos on the list, only three are social activists: Rizal, Andres Bonifacio and Marcelo del Pilar. One is a boxer: Manny Pacquiao (naturally enough), with 39 Wikipedia editions to his name—and 25.71 million page views in the six years between January 2008 and December 2013. (Rizal is a far second, with 7.08 million page views.) The rest are politicians: Marcos, Lapu-Lapu, Arroyo, Emilio Aquinaldo, Cory, Imelda Marcos, Manuel L. Quezon, Joseph Estrada, Fidel Ramos, Noynoy Aquino, Manuel Roxas, Diosdado Macapagal, Ramon Magsaysay and Ninoy Aquino. (Through a fluke, Ramos appears twice, under his own name and under “Presidency of Fidel V. Ramos.)

We can talk all day about the biases and promises of Wikipedia (for my money, it is the best source on Philippine election data), but the picture Pantheon paints is dismaying indeed: If Philippine “cultural production” is limited largely to our political personalities, what kind of culture are we producing?

On Twitter: @jnery_newsstand

By John Nery
Philippine Daily Inquirer

PHL needs to create 14.6 million jobs by 2016–WB report

Informal workers, or Filipinos who are employed without contracts or have fixed incomes, comprise the majority of the country’s current work force, according to the World Bank.

In the recent Philippine Economic Update, the World Bank said there are around 28 million informal workers and they comprise 75 percent of those who are employed.

Informal workers include, but are not limited to, street vendors and those who provide various services in the outsourcing, transportation and tourism industries, among others. They usually get paid low wages and generate low or minimal incomes.

“The informal sector is not necessarily equivalent to bad jobs. Nor can all jobs in the formal sector be considered good jobs. Moving to a formal sector job is not always the better choice.

People can choose to work in the informal sector and can still be better off. Jobs created in the informal sector are as important as jobs generated by big firms. What can be bad about the informal sector is when workers want to move up the job ladder, but cannot do so because of structural barriers,” the World Bank said.

The number of informal sector workers compounds the job generation challenge of the Philippines. The World Bank earlier noted that the country needs to create 14.6 million jobs by 2016.

However, even with this, the World Bank estimates that by 2016, around 12.4 million Filipinos would still be unemployed, underemployed, or would have to work in the informal sector.

Data showed that around 10 million Filipinos are either unemployed or underemployed. There are around 3 million unemployed and 7 million underemployed Filipinos.

“Under  the current high-growth scenario and the removal of key binding constraints in fast-growing sectors [e.g., skills constraint so that the business-process outsourcing  industry can accelerate its annual growth from  20  percent to  30  percent,  and  power  and  other  constraints  so  that  the manufacturing sector  can  see  a  doubling  of  employment],  the formal  sector  will  be  able  to  provide good  jobs  to  around 2.2  million  people  in  the  next  four  years  [or  550,000  every year between 2013 and 2016], or around double the current figure,” the bank said.

Due to this, the World Bank said the government must expand the formal sector employment faster while rapidly increasing the incomes of the informally employed.

The bank believes there is a window of opportunity for the Philippines to undertake these efforts. The country’s strong macroeconomic fundamentals, political stability and a popular government can implement much-needed reforms.

Further, the bank said the country can also benefit from the global and regional economic rebalancing and the strong growth prospects of a dynamic East Asia region.

The World Bank also said aging populations abroad offer new opportunities to the country’s young and dynamic labor force, while sectors that had previously been dominated  by  monopolies, such  as  telecommunication  and  air transport,  are  now demonstrably benefiting from past reform efforts that opened them up to competition.

“The Aquino government has demonstrated that it is not afraid to tackle vested interests in  areas  that  had  previously  been  too  sensitive  to reform,” the World Bank said.

“The government now needs to maximize the chances that the country will follow a more inclusive growth path and meet the jobs challenge  by accelerating  reforms  to  protect  property  rights, promote more competition and simplify regulations to trigger more private investments by firms of all sizes, while sustainably ramping up public investments in infrastructure, education and health,” it added.

Apart from the jobs challenge, World Bank estimated the country’s gross domestic product (GDP) to reach 6.6 percent in 2014 and 6.9 percent in 2015, depending on the pace of Supertyphoon Yolanda reconstruction and rehabilitation efforts.

The bank’s pre-Yolanda forecast puts the Philippines’s GDP growth at 6.7 percent in 2014 and 6.8 percent in 2015.

The bank also said a key challenge of the reconstruction process is to develop and enforce explicit standards for “building back better”—for safe and resilient buildings and infrastructure.

source:  Business Mirror

Mining returns for gov’t ‘must be twofold’

A CABINET OFFICIAL said he would push mining companies to pay bigger shares of their revenue to the government even though the industry maintains that taxes are already too high and higher ones could kill the business.

Taxation of Philippine miners is a thorny issue that has delayed development of the country’s vast mineral resources. President Benigno S. C. Aquino III, seeking to raise revenue from mining, has met stiff resistance.

Finance Secretary Cesar V. Purisima told the Reuters ASEAN Summit yesterday that the government should be getting one-half of gross revenue from mining.

Last year, according to a government agency, direct state revenue from mining was worth only 2% of total output, though miners also pay corporate income tax of 32% and other fees.

“Where I start is 50-50,” Mr. Purisima told the summit, held at the Reuters office in Manila. “The return of the government must be twofold -- as owner of the mineral, and two, as a taxing authority.”

Still, Mr. Purisima said it was the Philippine Congress that would decide the revenue-sharing formula, taking into account the industry’s position.

Within the next year, he said, the government is committed to getting tax legislation passed that features “a fair sharing where both the one who took risk, the mining company, and the one who owns the assets, are fairly rewarded.”

Current mining laws, including income tax holidays for start-up projects, have not created a win-win situation for the government and industry, Mr. Purisima said.

Government statistics show mining has been declining as a source of revenue. Taxes, fees and royalties from mining in the first nine months of last year came to P1.55 billion, only about 8% of the P18.8 billion collected in all of 2012, according to the Mines and Geosciences Bureau (MGB).

With nine million hectares of highly mineralized areas, the Philippines is believed to have some of the world’s biggest reserves of nickel, gold, and copper.

Last year, the government valued the Southeast Asian country’s untapped mineral deposits at about $850 billion. But investments and mineral production have slowed in the last three years as inconsistent policies and tax uncertainty have deterred investors. Mining investments between January and September last year totalled $787 million, according to MGB. That compared with $807.7 million for all of 2012 and $1.15 billion in 2011.

Miners say their risks are greater than elsewhere, and investments in infrastructure such as power and roads are costlier in less developed countries such as the Philippines. Given higher costs, they expect a higher rate of return from investing.

Anti-mining groups, including Roman Catholic Church leaders, say local communities have not benefitted from mining revenue and have been left with denuded mountains and silted rivers.

“We don’t want a situation where we’ll end up with holes in the midst of communities and once the rich minerals are gone and prices are down, they leave and the people will have nothing there,” Mr. Purisima said.

“That’s why we’d like to do it in the manner they do it in Canada and more advanced countries, where there is really a plan at the beginning on how to restore the environment they have,” he said. -- Reuters

source:  Businessworld