SAVE MONEY on TAXES June 1, 2020

Volume 6 Issue No. 22 map.org.ph June 2, 2020

“MAPping the Future” Column in the INQUIRER

SAVE MONEY ON TAXES June 1, 2020

Mr. RAYMOND “Mon” A. ABREA

Have you filed your 2019 annual income tax return (ITR)?

To save money from paying 25% surcharge, 20% interest and compromise penalty, make sure to file and pay your income tax on or before June 14, 2020. Note, however, that for individual taxpayers, the first quarter ITR for taxable year 2020 is also due on June 14 while non-individual or corporate taxpayers may file on or before June 29, 2020.

Whether companies are liquid, ready or not, taxes are coming due amid this crisis. As the Bureau of Internal Revenue (BIR) already reiterated, no more extensions as the government is in dire need of money to respond to the pandemic.

But beyond paying taxes, successful businesses will be those who will focus on saving money on taxes and creating more value in the new normal – the new or digital economy.

So, how to save money on taxes especially during the crisis? Here are some basic tax principles and concepts to help individual or non-individual taxpayers stay out of trouble with BIR and stay in compliance with the Philippine tax laws:

TAX DEADLINES

File and pay taxes correctly and on time to avoid penalties. If you want to know the applicable tax deadlines for your company, refer to BIR Form 2303 or certificate of registration where the tax types and deadlines including the specific forms to be used are all indicated.

Per Revenue Memorandum Circle 48-2020, taxpayers may file and pay taxes at the nearest Authorized Agent Banks (AABs) notwithstanding RDO jurisdiction, or file the tax return and pay corresponding tax due to the concerned Revenue Collection Officers (RCOs) of the nearest Revenue District Office (RDO), even in areas where there are AABs.

TAX OPTIONS

Every year, you are given a choice: 8% optional tax or graduated income tax, VAT or non-VAT, itemized deduction or optional standard deduction (OSD), among others. If you choose wisely, you can save money from paying unnecessary taxes.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, self-employed and professionals whose annual gross revenues do not exceed P3 Million may elect 8% optional tax rate in lieu of both income tax and percentage tax. The VAT threshold has also been increased to P3 Million which means those who do not exceed it may change registration from VAT to non-VAT.

For both individual and corporate taxpayers, they have an option to claim itemized deductions subject to substantiation or the 40% OSD. The choice has to be made upon filing of the first quarter ITR.

TAX CUTS

Amid the COVID-19 pandemic, countries around the world are implementing various emergency tax relief to address business and household liquidity issues. In the Philippines, we have at least two urgent pending tax reform bills which can help businesses bounce back. The first one is the immediate reduction of corporate income tax from 30% to 25% effective July 2020 as proposed under the CREATE bill.

CITIRA or Corporate Income Tax and Incentive Reform Act has been renamed to CREATE or Corporate Recovery and Tax Incentives for Enterprise Act with three major improvements:

1. reduction of the corporate income tax and longer NOLCO for losses of small businesses in 2020; 2. flexibility in the grant of incentives including non-tax incentives; and 3. longer transition period for firms currently enjoying the GIE incentive.

If your taxable income exceeds P8 Million and you want to pay 25% instead of 35% income tax, it’s a no-brainer to register a corporation and not a sole proprietor who is subject to the highest 35% for ultra-rich individual taxpayers or those whose income exceeds P8 million.

TAX AMNESTY

Who wants to pay penalties and interests? Nobody. That’s why RA 11213 or Tax Amnesty Act was passed swiftly. However, the President vetoed provisions on general tax amnesty – which is the second urgent pending tax reform bill if the government wants to collect at least P45 Billion. 2

For delinquency tax amnesty, the rates start at 40% of the basic tax for cases which are final and executory case, 50% for cases subject to final judgment of the courts and 60% for tax evasion cases pending before the Department of Justice, or the courts.

If you have delinquent accounts and you wish to avail of this tax amnesty, deadline is on June 22, 2020.

For estate tax amnesty, aside from waiving all penalties, interests and compromises, the estate tax rate is only 6% based on the value at the time of death or a minimum of P5,000 per transfer. Deadline is in June 2021. No need to rush but better to prepare all documents if you want to save money on estate tax arrears.

FIXING TAX PROBLEMS

Avoid tax avoidance if you are not certain. Charitable contributions or donations and losses are both deductible expenses which require substantiation. Otherwise, it may be disallowed during BIR audit and investigation and may even be subject to penalties and compromises.

Paying the right taxes is not necessarily paying more taxes.

In order to pay the right taxes, you need to hire a good and honest accountant. But sometimes, your non-accounting staff can be trained to do both the bookkeeping and tax compliance as long as you can trust them to take care of your taxes. You may also outsource or hire tax professionals for a quarterly or annual tax compliance review just to make sure that any possible tax exposure is addressed before BIR audit.

For those who are audited yearly by the BIR, you really need to fix your tax problem and avoid paying under-the-table which maybe one of the reasons why BIR examiners want to check on you every year. Hiring a “fixer” who will simply negotiate with the BIR examiner may help settle your tax assessment in the meantime but not necessarily fix your tax problems.

How to fix our tax problems? a. Legislation – a lot of the tax problems we encounter is attributed to our rigid and outdated tax laws. Either the rates are too high, or they are simply too many and complicated for an ordinary taxpayer to comply.

If you want to save money on taxes, you have to know and understand the Comprehensive Tax Reform Program of the government so you can support the bills which you think can really help lessen the tax burden and avail of the tax benefits once they get passed into law.

After the historic passage of the TRAIN Law which increased the exemption for personal income tax to P250,000, the tax amnesty act and higher excise taxes for cigarettes and alcoholic drinks were also legislated. The next tax reform bills will lower corporate income tax and rationalize fiscal incentives, offer general tax amnesty, and focus on real property valuation and financial income. 3

After the general tax amnesty, the BIR and the Bureau of Customs (BOC) must be able to send tax evaders and smugglers to jail. Otherwise, tax evasion and smuggling will continue to proliferate as they get away with tax authorities by compromising their cases. b. Administration – equally important in reforming the tax system is improving tax administration. Tax policy reforms must be complemented and supported by tax administration reform. Bureaucracy and corruption will only be addressed by digital transformation or automation of most of the transactions or dealings with taxpayers including audit and investigation.

The government can keep adding new taxes but unless it addresses the tax leakages and invests in IT infrastructure and capabilities so BIR examiners will be equipped to assess conglomerates and international tech companies with more sophisticated business models, it will not improve tax collections or the tax effort ratio significantly to hit revenue targets.

That’s mainly the reason why new taxes, including the proposed digital tax, must be studied carefully both on policy and administration perspective if we don’t want to send civilians to war.

The key areas for tax reform have always been broadening both the tax and taxpayer base, simplifying tax compliance and lowering tax rates to make it more competitive and acceptable to both individual and non-individual taxpayers. c. Compliance – the successful completion of the ongoing tax reform and digital transformation of both BIR and BOC will gradually improve tax compliance.

But what can businesses do during this crisis to prepare for audit, amnesty or tax compliance? Equally important to ask is how can businesses help the government to restart the economy?

There is no simple or easy answer but definitely a comprehensive tax audit and compliance review must be done now while we are on a lockdown. If the government will offer a tax relief, we should also do our share to help the most vulnerable ones by paying our taxes correctly.

Fixing the tax system is the government’s mandate, but fixing our tax problems is our responsibility as a good taxpayer on top of saving money on taxes, penalties and compromises. Take advantage of the economic tax relief offered by the government so you can bounce back stronger and better.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP. The author is a member of the MAP Tax Committee and the MAP Ease of Doing Business (EODB) Committee. He is the Co-Chair of the EODB Task Force on Paying Taxes and the brainchild of TaxWhizPH mobile app. He was recognized as one of the 2017 Outstanding Young Persons of the World, 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), and an Asia CEO Young Leader because of his tax advocacy and expertise. Currently, he is the Chair and Senior Tax Advisor of the Asian Consulting Group (ACG) and founding Trustee of the Center for Strategic Reforms of the Philippines (CSR Philippines). Feedback at and . For previous articles, please visit )

“MAP Insights” Column in BUSINESSWORLD

TRUST: The Most Stable ‘Currency’ in the

COVID Crisis and Recovery June 2, 2020

Mr. JUNIE S. DEL MUNDO

The rise of COVID-19 from a ‘crisis-to-watch’ back in late November 2019 to a global pandemic that got every country into a virtual lockdown, is nothing short of meteoric. The world’s economy fell in doldrums with businesses (except for a handful) struggling with almost non-existent operations, disrupted supply chains and an unprecedented surge or drop in demand that were not even in any planning scenario. We are all caught flat-footed in this continuously evolving threat, at a loss as to what will come next, not knowing where to start our business continuity and recovery efforts.

The COVID-19 pandemic is redefining many aspects of the society, the environment and the world. It is revealing vulnerabilities of both public and private institutions, and in sharp contrast, showing the strengths of communities, families and individuals to come together and ‘save the day’. We see heightened activities in the social media that has become a potent ‘microphone’ for the people to say what they think and feel; and how this platform is being used to amplify the message that the governed should have influence over the decisions and actions of those who govern. Trust has become the most stable ‘currency’ that institutions must have in huge reserve to engage stakeholders.

The acceptance or rejection of the behavior, actions and policies adopted by the government and the business organizations depend on how well they are trusted to deliver on what was promised. People are looking closely not at just the plans, but how well these are implemented; not just at the pronouncements or press releases but what their networks’ – families, friends, co-employees, communities – testimonials are. The talk must be the walk.

Therein lies the challenge. Because trust is a critical factor in crisis, its presence constitutes a major capital for organizations and leaders, one that can be leveraged on to bounce back and recover faster in the aftermath. Conversely, its absence will dictate how long a time they will need to regain lost ground, if they survive at all.

How are the actions increasing or decreasing the trust reserves? The most successful brands use their power and capabilities to be at least one of these qualities to their stakeholders: helpful, useful, or uplifting.

For instance, insurance company Pru Life UK launched free COVID-19 insurance for 500,000 Filipinos through their healthcare management app, Pulse. HP Philippines provides free printable templates to engage parents looking for activities to do with their children. Total Philippines showed its support with medical frontliners by letting them gas up for free at key Total stations around Manila.

Companies who are showing compassion to their employees by coming to their assistance at this time of need are perceived more favorably than those who are announcing plans to lay off workers. Airlines are winning and losing by the policies they adopt on cancellations and refunds.

There are LGUs that are stepping up and providing creative solutions to provide access to food and transportation; and the people responded by coming to the rescue of these trusted leaders, protecting them from political repercussions. In contrast, we also witness how the political shine of other local leaders dimmed because of lack of trust that they can deliver.

Communication to stakeholders has become a critical component in trust-building. Credible, transparent and reliable information are the best defenses to lies, fear, anxiety and wrong perceptions. Because the medium is the message, it is vital that leaders and organizations pay equal importance to both content and the one tasked to deliver this, to ensure that the narrative covers all the touchpoints – not just with data and numbers, but also with emotions. Proper communication cannot be left to chance; it requires insights, empathy, critical thinking and discipline to strike a note that will swing the trust pendulum in the right direction.

Finally, we must not be afraid to say that we do not have all the answers and that we can commit mistakes. Transparency is a must if we are to build a trust-based relationship with our stakeholders.

Gaining the trust of our stakeholders takes time. It adds up with every action that shows how we put the customers first by giving them their money’s worth; by how we improve their experience with every complaint they report; by how well we treat our employees; by the importance we place for purpose, not just profit; and by our concern for environment, sustainability and governance.

Communication is the bridge that connects what we do to build this trust, the stakeholders we need to build relationships with, and to society in general.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP). ------JUNIE DEL MUNDO is Vice Chair of the MAP CEO Conference Committee and the Chair and CEO of The EON Group, a fully integrated communications consultancy with expertise in consumer and corporate PR; reputation management and public affairs; digital marketing and creative technology; and experiential marketing. [email protected] [email protected] http://map.org.ph

May 31, 2020 Joint Statement on Rule of Law in the Midst of COVID-19 Pandemic

News articles about the May 28, 2020 FINEX-MAP-co-hosted

Meeting of the Business Community and the Joint Statement of Support for CREATE (Revised CITIRA)

1. “Dominguez to biz community: Help convince Congress to pass CREATE bill” by Bernadette D. Nicolas BUSINESS MIRROR May 28, 2020

The government’s economic team asked the business community to help convince Congress to pass in its last session week the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill that will mark the country as a “premier investment destination” for companies looking to diversify their supply chains in the wake of COVID-19 pandemic.

Rather than increasing the national budget and passing funds through less efficient government programs to ensure the country’s recovery from the COVID-19 pandemic, Dominguez told business leaders on Thursday that the Duterte administration decided to “leave the money in the hands of the private sector” through the passage of CREATE bill.

“Let me emphasize that this reform measure is really about trusting the private sector. Instead of increasing our budget and passing funds through what tend to be less efficient government programs, we will leave the money in the hands of the private sector,” Dominguez said in a webinar hosted by Financial Executives Institute of the Philippines (FINEX), Management Association of the Philippines (MAP) and other business organizations.

CREATE, the “recalibrated” version of Corporate Income Tax and Incentives Rationalization Act (CITIRA), is being touted by the Department of Finance as the “largest fiscal stimulus program for enterprises in the country’s history.”

Under the “first-ever revenue-eroding tax reform package” proposed by the Philippine Department of Finance, the government will be foregoing at least P667 billion in government revenues between 2020 and 2027 as a result of cutting the current 30 percent CIT rate — the highest in the Asean region.

The bill seeks an outright five percent cut in the CIT rate to 25 percent by July this year and a 1-percentage point reduction every year from 2023 to 2027 until the CIT rate reaches 20 percent.

“The firms can invest these funds in the revitalization of their businesses and create even more jobs for Filipino workers. This is a simple yet effective measure to fire up our economy and quickly bring us back to the track of high growth,” he said.

Moreover, Dominguez said the CREATE bill is the “most important economic reform in decades.” 12

“I strongly believe that your collective voice will finally get us over the hill in this policy effort. The unequivocal support of the business sector is crucial in urging our lawmakers to rally behind this long-overdue reform. There could not be a stronger signal that this country is back in the game than the passage of CREATE,” he said.

In the same forum, 32 business groups have reiterated their strong support for the passage of CREATE which they said will act as a stimulus package that will be “a life- restoring boost to market confidence, providing the most direct, cost-efficient and instant relief to businesses suffering from business reverses due to COVID-19.”

“We humbly request the Senate and the House of Representatives to move quickly and decisively to push CREATE forward and to ensure its passage urgently, ideally before Congress adjourns on June 3. Any further delay comes at the risk of of losing more jobs and hemorrhaging more investments. Pass CREATE now!,” the business groups said in a joint statement.

However, IBON Foundation Executive Director Sonny Africa recently criticized the move to pass the CREATE bill, saying that it is the rich that will be benefit from the biggest corporate tax break in the Philippine history.”

Africa also lamented in the same commentary that the Duterte administration is “being hugely opportunistic in exploiting the COVID-19 crisis to push their long-standing TRAIN (Tax Reform for Acceleration and Inclusion) agenda of raising consumption taxes on poor and low-income groups while reducing taxes on the rich”, citing the proposal of Socioeconomic Planning Secretary Karl Chua to impose higher consumption taxes.

Responding to the criticism that the government is “giving up P667 billion in potential COVID-19 response funds to boost corporate profits,” Finance Assistant Secretary and spokesperson Tony Lambino told BusinessMirror that micro, small and medium enterprises are the main beneficiaries of the CREATE through the reduction of CIT rate.

“This will help them retain workers and pay their bills during this crisis period. Our current CIT rate is the highest in the ASEAN region and a burden especially to small businesses,” Lambino said in a text message.

Under the current setup, the finance official argued that smaller businesses pay the higher CIT rate at 30 percent while many of the largest companies are effectively paying 6 to 13 percent because of special tax treatment.

“In stark contrast, many of the largest companies receive special tax treatment—only 3,150 companies out of more than 989,000 BIR-registered firms in the country. This minority effectively pays 6 to 13 percent versus the 30 percent CIT rate that smaller businesses pay. This group that receives special treatment was granted this type of incentive indefinitely, with no time limit,” he said.

“Given the current crisis, the CREATE bill proposes a longer extension or sunset period for this group, from four to nine years, but not forever. Under the bill, however, they can also apply for new incentives,” he added. 13

In the same commentary, Africa also suggested that the funds for the COVID-19 response could instead be sourced from the accumulated wealth and income of the rich.

The non-profit research group is proposing that the government impose wealth tax, higher taxes on large corporations and higher taxes on the richest Filipinos.

“There’s no reasonable argument that taxing their wealth above P1 billion will adversely affect their well-being and welfare. A wealth tax of 1 percent on wealth above Php1 billion, another 2 percent above P2 billion, and another 3 percent above P3 billion will raise P236.7 billion annually from these 50 richest alone. They are not going to be spending this anyway versus the huge social, economic and health returns from using this for COVID-19 response,” Africa said.

“Other tax measures can also be considered. A two-tiered corporate income tax scheme with higher taxes on large firms and lower taxes on micro, small and medium enterprises can be designed to generate about Php70 billion annually. Similarly, a personal income tax scheme with higher taxes on just the richest 2.5% of Filipino families can raise about Php127 billion annually,” he added.

But Lambino said there is a downside to the proposed two tier system by IBON Foundation as “global experience shows that a two-tier system gets gamed by firms.”

“For example, larger companies split into multiple, smaller companies so that they can enjoy a lower tax rate,” he said.

2. “Special session proposed to pass CREATE bill, other critical measures” by Genshen L. Espedido BUSINESSWORLD May 28, 2020

A LEGISLATOR has asked President Rodrigo R. Duterte to seek a special session of Congress in order to pass “critically-needed” measures to boost the economy, such as the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

In a statement Thursday, Albay Representative and House Ways and Means committee chairman Jose Maria Clemente S. Salceda said that the House intends to pass its stimulus recovery program before it adjourns, and that it has already “done its duty of passing the old version of CREATE, which is CITIRA (Corporate Income Tax and Incentives Rationalization Act), and will in fact adopt the Senate version if they pass it on Monday or Tuesday next week.”

“We have to get both of these measures done now. I would of course prefer to have them approved for the President’s signature next week, but if we cannot, the best alternative is a special session,” he said.

The CREATE bill is the revised form of CITIRA, which accelerates the timetable for reducing the corporate income tax to 25% from the current 30%.

The tax rate will be further reduced by 1 percentage point annually beginning 2023 until 2027. In CITIRA, the bill proposed to gradually reduce the rate until it hits 20% in 2029. The tax reductions were accelerated due to the coronavirus disease 2019 (COVID-19) crisis. The bill is now positioned as a means of attracting investment from foreign companies looking to move out of China.

Mr. Salceda estimates that about $12 billion in foreign investment has been foregone due to the two-year delay in passing corporate tax reform legislation, which was approved by the Cabinet in January 2018. He added that a delay in the passage of an “adequate” economic recovery plan costs the economy up to P100 billion in new economic activity every week.

“Every single week that we are unable to pass an economic stimulus plan and the corporate tax reform costs us hundreds of billions of pesos in foregone opportunities every week. At that rate, hindi na po kayang palagpasin pa hanggang July (It cannot wait beyond July). June is the time to get them enacted, so that we can still reap the benefits in the second half. Kami po sa House (We in the House) are confident that if we have to, we can get both approved by June 3. If the Senate cannot, the President should extend session and not terminate until they get both passed,” he said.

Finance Secretary Carlos G. Dominguez III said that the tax reform package entrusts in the private sector the funds and resources needed to “fire up the economy and quickly bring back the country to the path of high and inclusive-growth.”

“There is no better time to reform our corporate income tax system, and modernize our fiscal incentives system than now. This could be the most important economic reform in decades. As statements of our partners in industry and civil society show, the economy can no longer bear any delay in this reform. Now is the best time to do it,” Mr. Dominguez said in a statement Thursday.

Mr. Dominguez said that 5% CIT reduction is expected to reduce government revenue by P42 billion in the second half of the year if CREATE is implemented by July, and by another P625 billion over the next five years. The tax cuts are expected to fuel economic activity as businesses, especially micro, small and medium enterprises (MSMEs), retain more funds to support their operations and keep employees at work.

Business groups on Thursday expressed their support for the immediate passage of CITIRA, saying that the measure will be a “life-restoring boost to market confidence, providing the most direct, cost-efficient and instant relief to businesses suffering from business reverses due to COVID-19.”

“The instant 5% tax savings by July is a direct infusion of financial assistance to businesses, giving them more resources to retain employees and to keep up with financial difficulties. As an investment- attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines,” according to the joint statement of 32 groups.

Aside from the tax cuts, CREATE also extends the sunset period for current incentive recipients from two to seven years; lengthens the effectivity to five years of the net operating loss carryover (NOLCO) for non-large taxpayers from the current three years; 15

and grants discretion to the Fiscal Incentives Review Board (FIRB) to recommend to the President longer incentives and additional non-fiscal incentives for critical investments. “We humbly request the Senate and the House of Representatives to move quickly and decisively to push CREATE forward and ensure its passage urgently, ideally before Congress adjourns on June 3. Any further delay comes at the risk of losing more jobs and hemorrhaging more investments,” according to the joint statement.

3. “Businesses back CREATE bill as 'instant relief' for struggling firms” by Melissa Luz Lopez CNN Philippines May 28, 2020

Metro Manila (CNN Philippines, May 28) – A group of 32 industry organizations has called on Congress to pass a new bill providing lower taxes and longer fiscal perks to companies, saying this will serve as the quickest path to their recovery amid the pandemic.

Small firms and even large corporates issued a joint statement of support for the Corporate Recovery and Tax Incentives for Enterprises, or CREATE Act, which revamps the earlier proposal of the Department of Finance on income taxes.

The DOF has touted the measure as the replacement of the Corporate Income Tax and Incentives Rationalization Act, or CITIRA, which was already nearing final approval in the legislative mill when the COVID-19 crisis struck. The agency wants lawmakers to swap that bill with CREATE, touted as part of the state's "bounce back" plan.

"As a stimulus package, CREATE will be a life-restoring boost to market confidence, providing the most direct, cost-efficient and instant relief to businesses suffering from business reverses due to COVID-19," the group said in a statement issued during the joint meeting of the Financial Executives of the Philippines and the Management Association of the Philippines on Thursday.

"As an investment-attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines," they added.

CREATE will trim the corporate income tax rate from the current 30 percent to just 25 percent by July, followed by an annual reduction of 1 percentage point from 2023 until 2027. This is faster that the original version that will bring down the levy to 20 percent only by 2029.

The bill is unique as this was the first time in history for the DOF to ask Congress to pass a revenue-eroding measure rather than one that solicits additional funds for the state.

Finance Secretary Carlos Dominguez III said the agency is willing to forgo ₱42 billion in income taxes from July-December, on top of ₱625 billion for the next five years all in the name of reviving economic activity.

"These foregone revenues to fuel economic activity can be used by businesses, especially micro, small and medium enterprises, to fund their operations and retain their employees," he said in his Thursday speech.

The private firms said the sharp drop in the tax rate as early as July, followed by subsequent reductions, would "brighten business outlook even further" and provide additional cash so employers can retain their workers despite the current funding crunch.

Also part of the bill is an extension of current tax breaks and other incentives to as long as nine years, as well as a five-year window for companies to report losses incurred this year due to the coronavirus shutdowns.

Metro Manila and other key business hubs have been placed under strict stay-at-home rules for the last two months to contain COVID-19 infections, which left factories and stores dark and low-income employees without work.

ANALYSIS: A bounce-back strategy for 'a crisis like no other'

The chambers want Congress to possibly have it ready for signing into law next week – the last week of sessions before Congress goes on a break. "Any further delay comes at the risk of losing more jobs and hemorrhaging more investments," they added. The government's economic recovery program is said to be worth ₱846 billion, meant to get businesses back on track and create more jobs through new measures and non- cash interventions.

4. “Dominguez asks business sector to convince Congress to pass CREATE bill” By Ted Cordero GMA News May 28, 2020

Finance Secretary Carlos Dominguez III on Thursday sought the support of the business community to help convince Congress to pass the corporate income tax reform bill.

“I invite all of you to participate in convincing our Congress of the need to urgently pass this bold reform. There is no better time to reform our corporate income tax system, and modernize our fiscal incentives system than now. This could be the most important economic reform in decades,” Dominguez said during a virtual joint meeting of local and foreign business groups hosted by Financial Executives Institute of the Philippines (FINEX) and Management Association of the Philippines (MAP).

“As statements of our partners in industry and civil society show, the economy can no longer bear any delay in this reform. Now is the best time to do it,” he said.

The Cabinet official made the call days ahead of the Congress' sine die adjournment from June 6 to July 26, 2020. 17

The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill —the modified version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill —provides for an outright 5% cut in the corporate income tax (CIT) rate from the current 30% and an improved set of flexible tax and non-tax incentives for investors.

With the CIT cut, Dominguez said the government entrusts in the private sector the funds and resources needed to fire up the economy and quickly bring back the country to the path of high-and inclusive-growth.

“Rather than increase the national budget and pass funds through less efficient government, the Duterte administration has decided that the more prudent and effective approach in ensuring the country’s recovery from the coronavirus disease 2019 (COVID-19) crisis is by reenergizing the business community through this tax reform, now dubbed the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE),” the Finance chief said.

The immediate 5% CIT reduction will send a strong signal to the world that the Philippines is positioning itself as a premier investment destination for companies that are looking to diversify their supply chains in the wake of the global health emergency triggered by COVID-19.

The 5% CIT reduction is estimated to reduce government revenues by P42 billion in the second half of the year alone if CREATE is implemented by July, and by another P625 billion over the next five years.

However, the foregone government revenues could fuel economic activity as this can be used by businesses, especially micro, small and medium enterprises (MSMEs), to fund their operations and retain their employees.

The urgent passage of the CREATE bill, Dominguez said, is one of the five measures that he has recommended to President Duterte to help the country beat the pandemic and bring it back to the path of inclusive and shared prosperity.

Aside from the outright tax cut, among the major features of the CREATE bill are the following:

• Additional 1-percentage point reduction every year from 2023 to 2027 until the CIT rate reaches 20 percent • Extension of the sunset period for current incentive recipients from two to seven years, provided under the original CITIRA, to four to nine years to help them adjust in this difficult time • Lengthening the period of the net operating loss carryover (NOLCO) for non-large taxpayers from the current three years to five years, which will be credited for losses incurred in 2020

• Flexibility of the Fiscal Incentives Review Board (FIRB), which will be allowed to recommend to the President the grant of longer incentives and additional non-fiscal incentives for deserving investments The corporate tax reform bill, previously known as CITIRA, was approved at the House of Representatives in September 2019 as House Bill No. 4157. The Senate version, Senate Bill No. 1357, which is certified as urgent by President Rodrigo Duterte, is undergoing interpellations.

In a joint statement, 32 of the biggest groups in the country expressed support for the passage of the CREATE bill.

“We expressly reiterate our strong support for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). CREATE is a bold, historic economic reform, one of the largest and most game changing in decades," the joint statement read.

5. “Biz groups call for immediate passage of CREATE bill, but caution vs. abuse” By Jon Viktor D. Cabuenas GMA News May 28, 2020

Thirty-two of the Philippines' biggest business groups have called on Congress to immediately pass the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), but warned that cautionary measures should be put in place to prevent abuse.

In a virtual press conference on Thursday, the groups said Congress must prioritize the passage of CREATE before the session is adjourned on June 3, 2020.

"Business and professional associations and chambers banded together to issue a joint statement addressed to Congress," said Eduardo "Eddie" Yap.

Yap currently serves as the chairman of the National Affairs Committee of the Financial Executives of the Philippines (FINEX), which co-hosted the joint meeting of the business community along with the Management Association of the Philippines (MAP).

"We expressly reiterate our strong support for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). CREATE is a bold, historic economic reform, one of the largest and most game-changing in decades," the statement read.

"As a stimulus package, CREATE will be a life-restoring boost to market confidence, providing the most direct, cost-efficient, and instant relief to businesses suffering from business reverses due to COVID-19," it added.

CREATE is a repackaged version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which seeks to immediately reduce the corporate income tax to 25% from 30% currently.

"The instant 5% tax savings by July is a direct infusion of financial assistance to businesses, giving them more resources to retain employees and to keep up with financial difficulties," the statement read.

"As an investment-attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines," it added.

The business groups noted, however, that the proposal to give flexible authority to the Fiscal Incentives Review Board (FIRB) and the President in granting both fiscal and non-fiscal incentives should be watched.

"This will make the tax incentives system an agile mechanism that can adapt easily to changes in the global business environment, and can very decisively seize high-value investment opportunities when they are presented," they said.

"However, we urge that proper safeguards must be put in place to prevent abuse of discretion or be a political tool to grant favors to undeserving recipients," the statement read.

The 32 business groups that signed the statement are the following:

1. Alyansa Agrikultura 2. Anvil Business Club 3. Bankers Association Of The Philippines (BAP) 4. Cebu Business Club (CBC) 5. Cebu Leads Foundation (CLF) 6. Chinese Filipino Business Club, Inc. (CFBCI) 7. Entrepreneurs’ Organization (EO) Philippines 8. Federation Of Filipino-Chinese Chambers Of Commerce & Industry, Inc. (FFCCCII) 9. Federation Of Indian Chambers Of Commerce (Phil) Inc. (FICCI) 10. Financial Executives Institute Of The Philippines (FINEX) 11. Foundation For Economic Freedom (FEF) 12. Institute For Solidarity In Asia, Inc. (ISA) 13. Institute Of Corporate Directors (ICD) 14. Investment House Association Of The Philippines (IHAP) 15. Management Association Of The Philippines (MAP) 16. National Real Estate Association (NREA) 17. Organization Of Socialized Housing Developers Of The Philippines (OSHDP) 18. People Management Association Of The Philippines (PMAP) 19. Philippine Center For Entrepreneurship (GO NEGOSYO) 20. Philippine Chamber Of Commerce & Industry (PCCI) 21. Philippine Council Of Associations And Association Executives (PCAAE) 22. Philippine Hotel Owners Association Inc. (PHOA) 23. Philippine Institute Of Certified Public Accountants (PICPA) 24. Philippine Retailers Association (PRA) 25. Philippine Women’s Economic Network (PHILWEN) 20

26. Procurement And Supply Institute Of Asia (PASIA) 27. Rural Bankers Association Of The Philippines (RBAP) 28. Shareholders’ Association Of The Philippines (SHAREPHIL) 29. Subdivision And Housing Developers Association (SHDA) 30. Tax Management Association Of The Philippines (TMAP) 31. Up School Of Economics Alumni Association (UPSEAA) 32. Women’s Business Council Philippines (WBCP)

The statement was welcomed by Finance Secretary Carlos Dominguez III.

"Thank you for this support. We value it and we think this is a real step forward for the country," he said during the same event.

Earlier this week, Ateneo de Manila University School of Government dean and economist Ronald Mendoza warned that rushing the passage of another tax reform measure would do more harm than good.

"Let's not rush TRAIN2/CITIRA/CREATE (or whatever they are calling it now) and make an effort to get it done better compared to TRAIN1 and rice tariffication," he said in a position paper. — BM, GMA News

6. “32 business groups call for urgent passage of CREATE” By Bernie Cahiles-Magkilat MANILA BULLETIN May 28, 2020

Some 32 business groups in the country have banded together to reiterate their strong support for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

“CREATE is a bold, historic economic reform, one of the largest and most game changing in decades. As a stimulus package, CREATE will be a life-restoring boost to market confidence, providing the most direct, cost-efficient and instant relief to businesses suffering from business reverses due to COVID-19,” the business groups said a joint statement.

The businessmen particularly cited the immediate reduction of corporate income tax (CIT) rate from 30 to 25 percent by July 2020, which would instantly bring the country close to the ASEAN average of 23 percent, and the further reduction of the CIT to 20 percent by 1 percentage point reduction per year from 2023 to 2027, which would brighten business outlook even further.

The instant 5 percent tax savings by July is a direct infusion of financial assistance to businesses, giving them more resources to retain employees and to keep up with financial difficulties. As an investment-attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines.

They also lauded the extension of NOLCO (net operating loss carryover) for additional 2 years, from the current 3 years to 5 years, for losses incurred in 2020 for all taxpayers. This also drastically reduces the downside a company expects from COVID-19, and tilts 21

the decision-making process very strongly towards maintaining operations through the recovery years after 2020 – making the amendment a very robust job protection measure, considering that, in 2020, substantial losses will cut across all businesses, whether large or non-large, and all sectors, especially those hard-hit by COVID-19.

They also rallied behind the proposal to give flexible authority to the Fiscal Incentives Review Board (FIRB) and the President in granting both fiscal and non-fiscal incentives. This will make the tax incentives system an agile mechanism that can adapt easily to changes in the global business environment, and can very decisively seize high-value investment opportunities when they are presented. However, we urge that proper safeguards must be put in place to prevent abuse of discretion or be a political tool to grant favors to undeserving recipients.

Lastly, businessmen support the granting of a maximum transitory period of 9 years for current holders of incentives and appropriate gross income earned (GIE) tax rate.

“We humbly request the Senate and the House of Representatives to move quickly and decisively to push CREATE forward and ensure its passage urgently, ideally before Congress adjourns on June 3. Any further delay comes at the risk of losing more jobs and hemorrhaging more investments. Pass CREATE now!,” the business groups said.

The business groups include Alyansa Agricultura, Anvil Business Club, Bankers Association of the Philippines, Cebu Business Club, Cebu Leads Foundation, Chinese Filipino Business Club Inc., Entrepreneurs’ Organization Philippines, Federation of Filipino-Chinese Chambers of Commerce & Industry Inc., Federation of Indian Chambers of Commerce (PHIL) Inc., Financial Executives Institute of the Philippines, Foundation for Economic Freedom, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Investment House Association of the Philippines, Management Association of the Philippines, National Real Estate Association, Organization of Socialized Housing Developers of the Philippines, People Management Association of the Philippines, Philippine Center for Entrepreneurship, Philippine Chamber of Commerce and Industry, Philippine Council of Associations and Association Executives, Philippine Hotel Owners Association Inc., Philippine Institute of Certified Public Accountants, Philippine Retailers Association, Philippine Women’s Economic Network, Procurement and Supply Institute of Asia, Rural Bankers Association of the Philippines, Shareholders’ Association of the Philippines, Subdivision and Housing Developers Association, Tax Management Association of the Philippines, UP School of Economics Alumni Association, and Women’s Business Council Philippines.

7. “Congress urged to pass CREATE bill before recess” By Kris Crismundo Philippine News Agency May 28, 2020

MANILA – Philippine Chamber of Commerce and Industry (PCCI) president Benedicto Yujuico has called on Congress to pass the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill before sessions go on recess next week.

In a virtual forum of the Financial Executives Institute of the Philippines on Thursday, Yujuico, along with representatives of other business groups, urged lawmakers to 22

immediately enact the bill into law, which is expected to help stimulate economic activities under the “new normal” due to the coronavirus disease 2019 (Covid-19) outbreak.

“We cannot afford to wait until the next session to have this Corporate Recovery and Tax Incentives for Enterprises Act pass. I sincerely believe that delaying the passage of this bill will not only delay the recovery of our economy but will also prolong the hardship of our people,” he said.

Businesses and investors are looking forward to reducing the corporate income tax (CIT) rate once the CREATE bill becomes a law.

Under the bill, the CIT will be reduced to 25 percent immediately from the current 30 percent.

Some 31 associations of businesses and professions issued a joint statement in support of the immediate passage of the CREATE bill during the forum.

“We humbly request the Senate and the House of Representatives to move quickly and decisively push CREATE forward and ensure its passage urgently, ideally before Congress adjourns on June 3. Any further delay comes at the risk of losing more jobs and hemorrhaging more investments,” their joint statement read.

In the same forum, European Chamber of Commerce of the Philippines (ECCP) president Nabil Francis applauded this move of the government to cut the CIT rate but wished to further reduce the taxes for enterprises to 20 percent before 2025.

“The competition is fierce. We are taking unprecedented competition, with our neighbors doing also the same thing,” Francis said.

Meanwhile, Trade Secretary Ramon Lopez said in a Viber message that the Department of Trade and Industry fully supports the CREATE bill, adding that this is better than the status quo and the Corporate Income Tax and Incentives Reform Act (CITIRA).

“It is what is needed by the country now as our businesses wrestle with the disruption in supply chains and markets brought about by the Covid-19 pandemic,” Lopez said.

The enactment of the CREATE bill into law, he said, would also address uncertainties among potential investors on the fiscal incentives regime of the government. (PNA)

8. “Philippines Inc. calls on Congress to urgently pass CREATE bill” By Ian Nicolas Cigara THE PHILIPPINE STAR May 28, 2020

MANILA, Philippines — With time running out, businessmen on Thursday called on Congress to quickly pass the Duterte government's revised corporate tax reform bill, saying the measure would serve as companies' main fix to the destruction of the coronavirus pandemic.

A "bold" and "historic economic" reform is needed to help firms recover and counter the effects of the virus, according to a statement by the Philippine Chamber of Commerce and Industry and 31 other business groups that threw their support behind the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.

The CREATE bill will be a "life-restoring boost to market confidence" in the country as it will provide "cost-efficient and instant" relief to businesses, they said.

If enacted into law, CREATE will immediately cut the corporate income levy to 25% from currently 30%, while keeping tax perks intact for longer periods. From there, corporate income tax (CIT) rates would go down 1-percentage point each year to 20% by 2027.

The provision, and other amendments, will be introduced to the Corporate Income Tax and Incentive Reform Act (CITIRA) currently pending at the Senate, which has until June 3 to pass the measure, following the government's schedule of the tax cut by July. The Lower House already approved CITIRA on its current form.

For the companies that signed the petition to be submitted to Congress, the instant 5- percent tax savings is a "direct infusion of financial assistance to businesses, giving them more resources to retain employees and keep up with financial difficulties."

"As an investment-attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines," they added.

The rallying call for the passage of CREATE comes as the government debates whether when to ease tough lockdown restrictions meant to stem the virus contagion. Quarantine rules for about three months now were so stringent that a government survey showed two-thirds of businesses getting shuttered and a fifth of workers displaced in the main island of Luzon.

CREATE is expected to operate in tandem with another bill called Bayanihan II, a government-initiated economic stimulus that makes use of the existing P4.1-trillion national budget while requesting for an additional P130 billion in fresh funding. The new allocations will mostly go to government banks as fresh capital for lending.

Time is running out for both bills however, as Congress is set to adjourn the current session by June 3. Legislators also have different priorities, keeping them preoccupied with other bills containing bolder economic stimulus measures which so far received a cool reception from the Executive.

"We humbly request the Senate and the House of Representatives to move quickly and decisively to push CREATE forward and ensure its passage urgently, ideally before Congress adjourns on June 3," the 32 business organizations said.

Aside from the instant CIT cut, CREATE also targets to incentivize firm investments by allowing companies to carry over their likely losses incurred this year to offset taxes over the next three to five years.

Another salient provision of the bill is expanding the role of the existing Fiscal Incentives Review Board, which will have the power to tailor-fit incentives for specific companies and recommend them for approval to the President. On this matter, businessmen stressed there's a need for "proper safeguards" in order to "prevent abuse of discetion or be a political tool to grant favors to undserving recipients."

That said, the business groups voiced out their support to the measure. "Any further delay comes at the risk of losing more jobs and hemorrhaging more investments. Pass CREATE now," they said.

The 32 business groups that signed the joint statement were: 1. ALYANSA AGRIKULTURA 2. ANVIL BUSINESS CLUB 3. BANKERS ASSOCIATION OF THE PHILIPPINES (BAP) 4. CEBU BUSINESS CLUB (CBC) 5. CEBU LEADS FOUNDATION (CLF) 6. CHINESE FILIPINO BUSINESS CLUB, INC. (CFBCI) 7. ENTREPRENEURS’ ORGANIZATION (EO) PHILIPPINES 8. FEDERATION OF FILIPINO-CHINESE CHAMBERS OF COMMERCE & INDUSTRY, INC. (FFCCCII) 9. FEDERATION OF INDIAN CHAMBERS OF COMMERCE (PHIL) INC. (FICCI) 10. FINANCIAL EXECUTIVES INSTITUTE OF THE PHILIPPINES (FINEX) 11. FOUNDATION FOR ECONOMIC FREEDOM (FEF) 12. INSTITUTE FOR SOLIDARITY IN ASIA, INC. (ISA) 13. INSTITUTE OF CORPORATE DIRECTORS (ICD) 14. INVESTMENT HOUSE ASSOCIATION OF THE PHILIPPINES (IHAP) 15. MANAGEMENT ASSOCIATION OF THE PHILIPPINES (MAP) 16. NATIONAL REAL ESTATE ASSOCIATION (NREA) 17. ORGANIZATION OF SOCIALIZED HOUSING DEVELOPERS OF THE PHILIPPINES (OSHDP) 18. PEOPLE MANAGEMENT ASSOCIATION OF THE PHILIPPINES (PMAP) 19. PHILIPPINE CENTER FOR ENTREPRENEURSHIP (GO NEGOSYO) 20. PHILIPPINE CHAMBER OF COMMERCE & INDUSTRY (PCCI) 21. PHILIPPINE COUNCIL OF ASSOCIATIONS AND ASSOCIATION EXECUTIVES (PCAAE) 22. PHILIPPINE HOTEL OWNERS ASSOCIATION INC. (PHOA) 23. PHILIPPINE INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (PICPA) 24. PHILIPPINE RETAILERS ASSOCIATION (PRA) 25. PHILIPPINE WOMEN’S ECONOMIC NETWORK (PHILWEN) 26. PROCUREMENT AND SUPPLY INSTITUTE OF ASIA (PASIA) 27. RURAL BANKERS ASSOCIATION OF THE PHILIPPINES (RBAP) 28. SHAREHOLDERS’ ASSOCIATION OF THE PHILIPPINES (SHAREPHIL) 29. SUBDIVISION AND HOUSING DEVELOPERS ASSOCIATION (SHDA) 30. TAX MANAGEMENT ASSOCIATION OF THE PHILIPPINES (TMAP) 31. UP SCHOOL OF ECONOMICS ALUMNI ASSOCIATION (UPSEAA) 32. WOMEN’S BUSINESS COUNCIL PHILIPPINES (WBCP)

9. “Business groups to Congress: Pass Create quickly” By Anna Leah E. Gonzales THE MANILA TIMES May 29, 2020

More than 30 business organizations on Thursday pushed Congress to immediately pass the Corporate Recovery and Tax Incentives for Enterprises Act (Create), which seeks to lower the country’s corporate income tax (CIT) rate more rapidly and rationalize fiscal incentives.

“We…reiterate our strong support for the immediate passage of Create. Create is a bold, historic economic reform, one of the largest and most game-changing in decades,” the groups said in a joint statement read during the “Recovering with Resilience: The Philippine Economic Bounce Back Plan” online forum organized by the Financial Executives of the Philippines (Finex) and the Management Association of the Philippines (MAP).

“As a stimulus package, Create will be a life-restoring boost to market confidence, providing the most direct, cost-efficient and instant relief to businesses suffering from business reverses due to Covid-19,” they added, referring to the coronavirus disease 2019, whose speedy spread worldwide forced governments to impose lockdowns that disrupted economic activities in their respective countries.

According to the organizations, the immediate reduction of the CIT rate from 30 percent to 25 percent by July and its further reduction by 1 percentage point annually to 20 percent by 2027 would brighten business outlook.

“The instant 5-percent tax savings by July is a direct infusion of financial assistance to businesses, giving them more resources to retain employees and to keep up with financial difficulties. As an investment-attracting move, the CIT cut drastically alters, for the better, the financial prospectus of the Philippines,” they said.

They also support the extension of the net operating loss carryover from the current three years to five for losses incurred this year for all taxpayers.

“This also drastically reduces the downside a company expects from Covid-19, and tilts the decision-making process very strongly towards maintaining operations through the recovery years after 2020, making the amendment a very robust job protection measure, considering that, in 2020, substantial losses will cut across all businesses, whether large or nonlarge, and all sectors, especially those hard-hit by Covid-19,” the groups said.

“We support the proposal to give flexible authority to the Fiscal Incentives Review Board and the President in granting both fiscal and nonfiscal incentives. This will make the tax incentives system an agile mechanism that can adapt easily to changes in the global business environment, and can very decisively seize high-value investment opportunities when they are presented,” they added.

The groups emphasized that proper safeguards must be put in place to prevent abuse of discretion or it being used as a political tool to grant favors to undeserving recipients.

“We humbly request the Senate and the House of Representatives to move quickly and decisively to push Create forward and ensure its passage urgently, ideally before Congress adjourns on June 3. Any further delay comes at the risk of losing more jobs and hemorrhaging more investments. Pass Create now,” they said.

The groups that signed the joint statement include the Anvil Business Club, Bankers Association of the Philippines, Federation of Filipino-Chinese Chambers of Commerce and Industry, Finex, Foundation for Economic Freedom, MAP, National Real Estate Association, Philippine Chamber of Commerce and Industry, Philippine Retailers Association, Philippine Women’s Economic Network, Rural Bankers Association of the Philippines, Tax Management Association of the Philippines, UP School of Economics Alumni Association, and Women’s Business Council Philippines.

News articles on the May 31, 2020

Joint Statement on Rule of Law in the Midst of COVID-19 Pandemic RECOVERY WITH RESILIENCE: The Philippine Economic Bounce Back Plan 1. “Businessmen 'appalled, dismayed' at public officials' violation of COVID-19 protocols” ABS-CBN News May 31, 2020

MANILA - Groups of businessmen said Sunday they were "greatly disappointed" about reports of public officials who are "violating with impunity" government's measures against COVID-19, which shuttered most businesses during the strict lockdown.

The groups, that include the American and Canadian chambers of Commerce of the Philippines and the Makati Business Club, said the guidelines of the inter-agency's task force on emerging infectious diseases (IATF-EID) have affected the livelihood and restricted the movement of millions of Filipinos.

The measures also brought "confusion and different interpretations of rules" that led to quarantine violations, the groups said, citing the reported arrest of some 30,000 alleged violators from March 17 to April 17.

"The compounding economic hardships and unfamiliarity with new rules resulted in many people languishing in detention centers for many days, thus risking exposure to the virus in overcrowded facilities," they said.

"We are therefore greatly disappointed – even appalled and dismayed – about news reports of public officials violating with impunity the IATF and DOH (Department of Health) protocols intended to protect public health."

The groups recalled the words of Metro Manila Police chief Maj. Gen. Debold Sinas, "We will arrest those who will not follow the guidelines.”

Sinas is facing criminal and administrative charges for allowing a social gathering for his birthday last May 8. 27

The groups said they trust local and national officials to "demonstrate beyond doubt the highest standards in observing and enforcing the rule of law and serve as role models in discipline and moral ascendancy."

"Upholding the law and ensuring faith in our justice system stand as the bedrock of our democracy, and will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less," they said.

The groups made the joint statement as Metro Manila and other urban hubs Cebu City and Davao City are set to be placed under a looser lockdown or general community quarantine beginning Monday, June 1.

The AMCHAM, CANCHAM and MBC are joined by the following in the joint statement: Financial Executives Institute of the Philippines, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Judicial Reform Initiative and, Management Association of the Philippines.

2. “Amid calls for public ‘discipline’, officials reminded to follow own quarantine rules” Atin ito PH News feature May 31, 2020

MANILA, Philippines — Business groups on Sunday expressed extreme disappointment over reports of government officials "violating with impunity" rules meant to curb the spread of the novel coronavirus as millions of Filipinos have been out of work and have had their movements restricted by the same rules.

This comes just a day before Metro Manila is set to enter general community quarantine, when thousands are expected to return to work after over two months of strict quarantine rules that included curfews and the shutdown of mass transportation.

The joint statement was signed by the American Chamber of Commerce of the Philippines, the Canadian Chamber of Commerce of the Philippines, FINEX Philippines, the Institute of Corporate Directors, the Institute for Solidarity in Asia, Judicial Reform Initiative, the Management Association of the Philippines and Makati Business Club.

"The restrictions under the IATF guidelines have affected millions, in terms of livelihood and freedom of movement. The impact has been much greater on families living near or below the poverty line, despite government's extension of financial aid. Additionally, the seeming confusion and different interpretations of rules led to numerous quarantine violations," the groups said.

"We are therefore greatly disappointed—even appalled and dismayed—about news reports of public officials violating with impunity the IATF and DOH protocols intended to protect public health."

No officials were named in the statement although violations by public officials have been well documented and officially played down. 28

Sen. Koko Pimentel and Police Maj. Gen. Debold Sinas, for instance, both breached quarantine protocols in the past two months.

Pimentel visited public areas, including a hospital, while he was waiting for results of a COVID-19 test even though people who may have the disease are supposed to be in isolation. The senator is facing a complaint, filed by a private lawyer, for breaking quarantine, but has otherwise not been sanctioned for what he did.

Sinas, chief of the National Capital Region Police Office, was criticized for holding a birthday gathering in the middle of the quarantine, when mass gatherings are prohibited. He faces criminal and administrative raps that will likely by dismissed.

President Rodrigo Duterte has virtually cleared Sinas, saying Metro Manila's top cop should not be blamed that a gathering was held for his birthday. He said Sinas' guests at the gathering could not be expected to wear face masks because food was served there.

In his last statement on the incident, Sinas asked the public to "move on" from the issue as he himself had already moved on.

On Saturday, the major general, along with other ranking NCRPO officials, underwent a second round of COVID-19 swab tests at Camp Caringal as part of a "preventive measure" against the disease, according to Police Brig. Gen. Ronnie Montejo, Quezon City Police District director.

'Pasaway' narrative

Since the outbreak began in the Philippines, public officials have been trumpeting the narrative Filipinos are "pasaway"— or are stubbornly ignoring quarantine guidelines— and are to blame for the rising cases of COVID-19 due to their lack of "discipline" and "cooperation."

On Sunday, the Palace called on the public to "cooperate" with quarantine protocols when Metro Manila shifts to GCQ.

"The government cannot fight COVID-19 alone. We need the concerted effort of everyone. The sacrifices of our people in the past 70 or so days are laudable and we must not put these to naught," the Palace said, even as experts from the University of the Philippines and the University of Santo Tomas said the country needs to improve its testing and contact tracing to prevent surges in COVID-19 cases.

Government officials have said on separate occasions that the responsibility of organizing shuttles for workers as well as testing them before going back to work, would be on employers.

"As the country rides this tide of uncertainty, we trust that our leaders at the national and local levels, will demonstrate beyond doubt, the highest standards in observing and enforcing the rule of law, and serve as role models in discipline and moral ascendancy," the groups said in their statement.

As of the health department’s latest, and late, tally, the current number of active cases in the Philippines stands at 12,466, with the total number of cases soaring well past 17,000 with 590 new cases.

3. “Nationwide round-up” by Vann Marlo M. Villegas BUSINESSWORLD May 31, 2020

Business groups denounce impunity of officials violating quarantine protocols

BUSINESS groups denounced the prevailing culture of impunity with reports of public officials violating quarantine protocols but not immediately held liable by law enforcers.

In a statement on Sunday, different private sector organizations said they have been supporting the “whole-of-government, whole-of-society” response against the coronavirus pandemic, noting that its members as well as their employees and officers were compliant with measures to contain the spread of the disease.

“We are therefore greatly disappointed — even appalled and dismayed — about news reports of public officials violating with impunity the IATF (Inter-Agency Task Force) and DoH (Department of Health) protocols intended to protect public health,” they said in a joint statement, without naming any official.

They noted that from March 17, the start of the strict lockdown, until April 17, almost 30,000 civilians had been arrested — with 6,616 undergoing inquest while 23,016 cases were for filing.

The total increased to nearly 41,00 by May 1.

Financial necessity and unfamiliarity with the new rules led to detention of people for days, which increased their risk of exposure to the virus in overcrowded facilities, they said.

They cited the rule of the Supreme Court reducing bail and allowing recognizance for the release of the accused.

The signatories are the American Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Judicial Reform Initiative, Makati Business Club, and Management Association of the Philippines.

They added that those arrested “suffered detention, costs, humiliation, and inconveniences, and some endured unwarranted jail time when unopened courts or government offices, or even limited bank branches, could not process their bail in a timely manner.”

The groups said they trust that the government will strictly observe and enforce the rule of law “and serve as role models in discipline and moral ascendancy.”

“Upholding the law and ensuring faith in our justice system stand as the bedrock of our democracy, and will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less,” they said.

Major General Debold M. Sinas, head of the National Capital Region police, celebrated his birthday with a party early this month despite protocols prohibiting mass gatherings.

He has been charged for violating quarantine protocols, along with 18 other policemen, but has not been ordered to step down from his post.

Senator Aquilino L. Pimentel is also facing charges for breaching quarantine protocols when he accompanied his wife who was due to deliver their child at the Makati Medical Center last March.

Mr. Pimentel tested positive for coronavirus.

According to the World Justice Project 2020, the Philippines has one of the weakest rule of law in the East Asia and the Pacific region, ranking 91st out of 128 countries in the Rule of Law index, same as last year.

The country rose in the ease of doing business ranking at 95 from 124 last year, according to the World Bank Doing Business 2020 report, citing the abolishment of the minimum capital requirement for domestic companies and by easing construction permit processing and streamlining process to secure occupancy certificates. — Vann Marlo M. Villegas

4. “Business groups seek fair enforcement of lockdown” By Elijah Felice Rosales BUSINESS MIRROR June 1, 2020

BUSINESS groups on Sunday called on the government to uphold the highest standards in observing and enforcing the rule of law after state officials themselves breached lockdown protocols intended to safeguard the public’s health.

In a statement, the business groups lambasted public servants who violated the guidelines on health and safety issued by the Interagency Task Force and the Department of Health. They said the rules were put in place to protect public health and should be adhered to by everyone, more so by people mandated to implement them.

They argued the quarantine restrictions affected the lives of millions of people, especially those living near or below the poverty line, in terms of livelihood and freedom of movement.

They added the seeming confusion and varying interpretations of the protocols resulted in thousands of quarantine violations. Citing official data, the business groups said close to 30,000 violators were arrested between March 17 and April 17—of which 6,616 had to undergo inquest and 23,016 are to face charges—and that number jumped to about 41,000 on May 1.

This matter had led Senate Minority Leader Franklin M. Drilon to point out on Friday, at a marathon Senate hearing on the proposed Bayanihan Law extension, that the second phase of the measure should exclude the penal provisions for quarantine violations, since Bayanihan is meant to help people in the pandemic, not punish them for minor infractions that can very well be prosecuted under the Revised Penal Code.

It was reported, the main business groups said at the weekend, that many of the arrested individuals suffered detention, costs, humiliation and inconvenience, and some even endured unwarranted prison time on failure of unopened courts and government offices to process their bail in a timely manner, the business groups lamented.

“Above happened even with the Supreme Court’s recently issued administrative circulars that reduce bail and allow recognizance as among the means of releasing the accused. The compounding economic hardships and unfamiliarity with new rules resulted in many people languishing in detention centers for many days; thus, risking exposure to the virus in overcrowded facilities,” they said.

As such, they find it disappointing to the point of dismay that a number of public officials violated the very rules they were supposed to implement for the welfare of their constituents.

One of the most controversial cases of this kind was the early-morning birthday party, also known as mañanita, thrown for National Capital Region Police Office (NCRPO) Chief Debold Sinas on May 8, photos of which were released by the NCRPO Public Information Office itself on its Facebook page.

The now-deleted images showed Sinas celebrating his birthday with his men in spite of a state order prohibiting the conduct of mass gatherings due to the coronavirus pandemic. It was also observed in the photos that police officers who attended the party failed to practice physical distancing and some of them were not even wearing face masks.

In spite of the violation, Sinas was instructed to maintain his position as Metro Manila police chief by none other than President Duterte himself.

The call to uphold the rule of law in the ongoing crisis was made in a joint statement by the Financial Executives Institute of the Philippines, Institute of Corporate Directors, Institute for Solidarity in Asia, Judicial Reform Initiative, Management Association of the Philippines and the Makati Business Club. Joining them in this call were the business chambers of American and Canadian firms.

5. “Business community ‘appalled, dismayed’ by rule of law double standard” By Jon Viktor D. Cabuenas GMA News May 31, 2020

The Philippines' biggest business groups -- along with other non-government organizations -- over the weekend expressed their disappointment with public officials who violated security and health protocols that they themselves were supposed to implement.

In a joint statement, the groups called on the administration to uphold the law for everyone, and ensure faith in the country's justice system.

"We are therefore greatly disappointed -- even appalled and dismayed -- about news reports of public officials violating with impunity the IATF and DOH protocols intended to protect public health," the statement read.

The statement was signed by the American Chamber of Commerce of the Philippines (AmCham), the Canadian Chamber of Commerce of the Philippines (CanCham), the Financial Executives of the Philippines (FINEX), the Institute of Corporate Directors (ICD), the Institute for Solidarity in Asia (ISA), the Judicial Reform Index (JDI), the Management Association of the Philippines, and the Makati Business Club (MBC).

In March, Senator Aquilino "Koko" Pimentel III visited a Makati hospital when he accompanied his pregnant wife, despite being a person under investigation for the coronavirus disease. He has since apologized for the violation.

In April, Overseas Workers Welfare Administration Deputy Administrator Mocha Uson spoke before a crowd of overseas Filipino workers (OFWs) under quarantine in Batangas City, even as mass gatherings were prohibited under the prevailing lockdown restrictions. She claimed social distancing measures were followed.

Earlier this month, National Capital Region Police Office (NCRPO) chief Police Major General Debold Sinas celebrated his birthday with numerous guests during a “mañanita.”

President Rodrigo Duterte came to the defense of Sinas and excused the violation, adding that the party was one of the NCRPO chief's accomplishments.

Meanwhile, ordinary citizens across the country had been jailed for violating lockdown restrictions.

"From March 17 to April 17, almost 30,000 violators had been arrested; 6,616 underwent inquest while 23,016 cases were for filing. the number was reported to have reached nearly 41,000 by May 1," the joint statement read.

"Many of those arrested suffered detention, costs, humiliation, and inconveniences, and some endured unwarranted jailtime when unopened courts or government offices, or even limited bank branches, could not process their bail in a timely manner," it added.

The statement noted that the incidents happened even as the Supreme Court issued administrative circulars that reduced bail and allowed recognizance as among the means of releasing the accused.

Moving forward, the groups called for all government officials to demonstrate the highest standards in observing the rule of law, with the support of the private sector.

"Upholding the law and ensuring faith in our justice system stands as the bedrock of our democracy, and will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less," it added.

As of Saturday, May 30, the Philippines had recorded 17, 224 confirmed cases of the coronavirus. This includes 3,808 recoveries and 950 deaths. — DVM, GMA News

6. “Biz groups ‘greatly disappointed’ by gov’t execs violating pandemic protocols” By Neil Arwin Mercado PHILIPPINE DAILY INQUIRER May 31, 2020

MANILA, Philippines — Several business groups have expressed their “disappointment” over public officials violating protocols set by the national government in response to the coronavirus disease (COVID-19) pandemic.

In a joint statement, the groups noted that government leaders—whether national or local—are expected to serve as role models in having discipline during the health crisis.

“We are therefore greatly disappointed – even appalled and dismayed – about news reports of public officials violating with impunity the IATF (Inter-Agency Task Force for the Management of Emerging Infectious Diseases) and DOH (Department of Health) protocols intended to protect public health,” the groups said.

“As the country rides this tide of uncertainty, we trust that our leaders at the national and local levels, will demonstrate beyond doubt, the highest standards in observing and enforcing the rule of law, and serve as role models in discipline and moral ascendancy,” they added.

The groups further said: “Upholding the law and ensuring faith in our justice system stands as the bedrock of our democracy.”

“[It] will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less,” the groups said.

Several government officials were met with criticisms over their supposed violations of quarantine protocols enforced by the government.

To recall, Overseas Workers Welfare Administration (OWWA) Deputy Administrator Margaux “Mocha” Uson visited some 332 quarantined overseas Filipino workers (OFWs) in Matabungkay in Lian, Batangas.

But she drew flak after the activity seemed to constitute “mass gathering” which is prohibited under quarantine guidelines.

Even National Capital Region Police Office (NCRPO) director Maj. Gen. Debold Sinas was criticized over a “mañanita“ to celebrate his 55th birthday.

Senator Koko Pimentel was also criticized for visiting a hospital to accompany his pregnant wife despite being a person under investigation for the coronavirus disease.

The business groups said that government protocols “have affected millions, in terms of livelihood and freedom of movement,” as they noted that “different interpretations of rules” have led to numerous violations among the public.

“From March 17 to April 17, almost 30,000 violators had been arrested; 6,616 underwent inquest while 23,016 cases were for filing. The number was reported to have reached nearly 41,000 by May 1,” the business groups said.

“Many of those arrested suffered detention, costs, humiliation, and inconveniences, and some endured unwarranted jail time when unopened courts or government offices, or even limited bank branches, could not process their bail in a timely manner,” they added.

The groups said that all of these happened even with Supreme Court administrative circulars “that reduce bail and allow recognizance as among the means of releasing the accused.”

“The private sector strongly supports the ‘whole-of-government, whole-of-society’ effort to respond and recover from the social and economic adversities brought about by the COVID-19 (coronavirus disease) pandemic,” the groups said.

“Together with the international community, we have demonstrated utmost cooperation, and enjoined our own officers and employees to abide by the quarantine rules of the IATF,” they added.

Business groups that joined in the statement include the American Chamber of Commerce of the Philippines (AMCHAM), the Canadian Chamber of Commerce of the Philippines (CANCHAM), the Financial Executives Institute of the Philippines 35

(FINEX), the Institute for Solidarity in Asia, Inc. (ISA), the Institute of Corporate Directors (ICD), the Judicial Reform Initiative (JRI), the Makati Business Club (MBC), and the Management Association of the Philippines (MAP).

7. “8 business groups slam quarantine inequity” By Roy Stephen C. Canivel PHILIPPINE DAILY INQUIRER June 1, 2020

MANILA, Philippines — Eight business groups criticized the government for its double standard in implementing the law wherein thousands of people were arrested but public officials were left unpunished for violation of the same COVID-19 protocols.

“Many of those arrested suffered detention, costs, humiliation, and inconveniences, and some endured unwarranted jailtime when unopened courts or government offices, or even limited bank branches, could not process their bail in a timely manner,” the groups said in a joint statement on Sunday.

“We are therefore greatly disappointed — even appalled and dismayed — about news reports of public officials violating with impunity the [Inter-Agency Task Force for Emerging Infectious Diseases] and [Department of Health] protocols intended to protect public health,” they added.

“The compounding economic hardships and unfamiliarity with new rules resulted in many people languishing in detention centers for many days, thus risking exposure to the virus in overcrowded facilities,” they said.

According to the latest available data of the Philippine National Police, more than 130,000 individuals have been arrested or fined for violating the quarantine law.

The groups were the Management Association of the Philippines, Financial Executives Institute of the Philippines, Makati Business Club, Institute of Solidarity in Asia, Institute of Corporate Directors, Judicial Reform Initiative, American Chamber of Commerce of the Philippines and Canadian Chamber of Commerce of the Philippines. Serve as role models

The groups said they hoped local and national officials would demonstrate the highest standards in observing and enforcing the law and serve as role models in discipline.

The statement mentioned Police Maj. Gen. Debold Sinas only in passing and did not mention the cases of Sen. Aquilino “Koko” Pimentel III, who was called out by officials of the Makati Medical Center for endangering lives when he went to the hospital to accompany his pregnant wife while under quarantine.

Also left unpunished was Overseas Workers Welfare Administration Deputy Administrator Margaux “Mocha” Uson, who posted false news on social media in violation of the Bayanihan law, which penalizes quarantine violations, spreading false information, hoarding, profiteering and other manipulations of prices.

The Bayanihan to Heal as One law, or Republic Act No. 11469, was signed into law last March 25 and expires on June 24 but Senate President Tito Sotto had said the Senate would likely approve RA 11469’s extension until September.

Three-month extension

Sotto said the three-month extension would allow President Duterte to continue realigning the budget, among other extraordinary powers, to be able to respond to the COVID-19 epidemic.

Senate Minority Leader Franklin Drilon, however, said he would seek the repeal of the penal provision in the law because it was being used by the police to arrest people without warrants and other police abuses, like the fatal shooting of mentally-ill Army veteran Winston Ragos in Quezon City on April 21.

“The Bayanihan Act is not a penal statute per se, the principal purpose of the law is to address an emergency and not punish a crime … My proposal is to delete the entire Section 6 because the acts in Section 6 are likewise punished in other laws,” Drilon said.

Among the envisioned changes in the Bayanihan is a standby allocation reaching P600 billion for emergency subsidy to workers, cash-for-work program, prevention and control of other diseases, large-scale COVID-19 testing, capital infusion to government banks, support programs for impacted sectors, support for the agricultural sector and funding for realigned programs and projects.

8. “Business groups to gov’t: Punish public officials violating ECQ rules” By Bernie Cahiles-Magkilat MANILA BULLETIN June 1, 2020

Business groups on Sunday demanded that the government should apply the same rule of law to public officials who violated the Enhanced Community Quarantine (ECQ) rules as they did to thousands of ordinary Filipinos who were arrested for violating the quarantine protocols.

“We are therefore greatly disappointed – even appalled and dismayed – about news reports of public officials violating with impunity the Inter Agency Task Force (IATF) and Department of Health (DOH) protocols intended to protect public health,” said a joint statement by the business group on Rule of Law in the Midst of COVID-19 Pandemic.

The private sector joint statement was issued the day before the National Capital Region transitions into the General Community Quarantine after two months of hard lockdown.

“As the country rides this tide of uncertainty, we trust that our leaders at the national and local levels will demonstrate beyond doubt, the highest standards in observing and enforcing the rule of law, and serve as role models in discipline and moral ascendancy. Upholding the law and ensuring faith in our justice system stand as the bedrock of our democracy, and will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less,” the statement added.

From March 17 to April 17, almost 30,000 violators had been arrested; 6,616 underwent inquest, while 23,016 cases were for filing. The number was reported to have reached nearly 41,000 by May 1.

In contrast, Major Gernal Sinas himself was photographed celebrating his birthday. The National Capital Region Police Office posted on its Facebook page photographs of the birthday celebration held by Sinas, who turned 55, in Camp Bagong Diwa in Taguig City on May 8 despite the ongoing ban against mass gatherings. The photos and the post have since been taken down.

The private sector strongly supports the “whole-of-government, whole-of-society” effort to respond and recover from the social and economic adversities brought about by the COVID-19 pandemic.

The joint statement was signed by the American Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, Financial Executive Institute of the Philippines, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Judicial Reform Initiative, Makati Business Club, and Management Association of the Philippines.

9. “Traders express dismay over ‘double standard’” By Maricel Cruz and Willie Casas, Benjamin Chavez, Rio N. Araja MANILA STANDARD June 1, 2020

Several business groups have hit the apparent double standard in the application of the rule of law for quarantine violators, saying more than 30,000 ordinary Filipinos have been arrested while certain public officials are flouting the protocols with immunity.

“The private sector strongly supports the whole-of-government, whole-of-society effort to respond and recover from the social and economic adversities brought about by the COVID-19 pandemic,” read the joined statement issued by the American Chamber of Commerce of the Philippines; the Canadian Chamber of Commerce of the Philippines; the Financial Executives Institute of the Philippines; the Institute for Solidarity in Asia, Inc.; the Institute of Corporate Directors; the Judicial Reform Initiative; the Makati Business Club; and the Management Association of the Philippines.

“We are therefore greatly disappointed—even appalled and dismayed – about news reports of public officials violating with impunity the IATF and DOH protocols intended to protect public health... Upholding the law and ensuring faith in our justice system stands as the bedrock of our democracy, and will enable the economy to survive and recover from these most trying times. The sacrifice of our people deserves nothing less.”

The business groups noted that ordinary Filipinos who were arrested for quarantine violations were treated differently from public officials who committed the same mistakes.

“Many of those arrested suffered detention, costs, humiliation, and inconveniences, and some endured unwarranted jailtime when unopened courts or government offices, or even limited bank branches, could not process their bail in a timely manner,” read the joint statement.

“As the country rides this tide of uncertainty, we trust that our leaders at the national and local levels will demonstrate beyond doubt the highest standards in observing and enforcing the rule of law, and serve as role models in discipline and moral ascendancy.”

Several public officials have drawn flak for what were seen to be violations of the quarantine guidelines, including National Capital Region Police Office head Maj. Gen. Debold Sinas over a mañanita to celebrate his 55th birthday while Sen. Aquilino Pimentel III for visiting a hospital to accompany his pregnant wife despite being a person under investigation for COVID-19.

Mass testing for inmates

A legislator on Sunday called for the testing of all inmates and correction officers showing early symptoms of respiratory ailments as he warned of a flare-up in COVID- 19 cases in the country’s prisons.

“Nobody should be left behind in terms of prompt access to free testing as well as patient care, support and treatment just because they happen to be in prison,” said Anakalusugan party-list Rep. Michael Defensor, vice chairman of the House’s health committee.

“We’re afraid we might have a much higher COVID-19 case fatality rate among inmates in particular owing to poor nutrition, limited access to health care and high rates of undiagnosed pre-existing conditions, including tuberculosis and human immunodeficiency virus infection.”

‘Replace Duque’

Filipino Nurses United on Sunday repeated its demand to replace Health Secretary Francisco Duque III for his alleged weak leadership that had caused unforgivable delays in the crafting and implementation of critical life-saving decisions.

“At no other time has the critical role of the Department of Health been so highlighted for its utter failure to ensure people’s access to timely, efficient and quality basic health services to fight the COVID-19 pandemic,” the group said in a statement.

The group cited Duque’s alleged failure to establish early COVID-19 infection prevention and control measures and the delay in identifying referral hospitals dedicated to COVID-19 patients, among other things.

The three airlines based in the Philippines may have to attract fresh investors to help them survive the extreme financial difficulties arising from the COVID-19 pandemic, Deputy Speaker and Surigao del Sur Rep. Johnny Pimentel said Sunday.

“The best way for the government to help our airlines is to create all the conditions and put in place all the precautions needed to hopefully allow them to slowly resume flight operations at least domestically,” Pimentel said.

“Clearly, the longer their planes stay on the ground, the more money they lose,” he said, referring to Philippine Airlines, Cebu Pacific and AirAsia Philippines.

Call on expenses

The group Kilusang Mayo Uno has called on the government and businesses to shoulder the work-related expenses of employees placed under the “work-from-home” scheme.

Private offices and government agencies should fully compensate their workers for the costs arising from work-from-home schemes, including but not limited to the cost of electricity, the internet, calls and texts, the group said.

Workers should not be made to pay for or subsidize the operational costs of companies. Neither should they be forced to buy devices needed by their employers.

Temporary dormitories

The Department of Public Works and Highways says it will begin construction of temporary dormitories for health-care workers at the Quezon Memorial Circle in Quezon City on the first week of June.

Public Works Secretary Mark Villar says the proposed dormitories were a much-needed facility for health-care workers to recharge their minds and bodies after a strenuous day at the frontlines of the COVID-19 pandemic.

In his report to Villar, Undersecretary Emil Sadain said the off-site dormitories were intended for the medical personnel of East Avenue Medical Center, Philippine Heart Center, Lung Center of the Philippines, National Kidney and Transplant Institute, Veterans Memorial Medical Center, V. Luna Medical Center and other hospital workers.

‘Close monitoring’

To ensure safety, the Department of Human Settlement and Urban Development on Sunday ordered the close monitoring of the resumption of construction work following the start of the implementation of the general community quarantine today.

“The protocols will be applied regardless of the classification of risks to ensure the protection of our workers and keep construction sites COVID-19-free,” Secretary Eduardo del Rosario said.

“Non-compliance will warrant the imposition of a cease-and-desist order against the covered entities.” 40

10. “Amid calls for public 'discipline', officials reminded to follow own quarantine rules” By Franco Luna THE PHILIPPINE STAR May 31, 2020

"We are therefore greatly disappointed—even appalled and dismayed—about news reports of public officials violating with impunity the IATF and DOH protocols intended to protect public health."

No officials were named in the statement although violations by public officials have been well documented and officially played down.

Sen. Koko Pimentel and Police Maj. Gen. Debold Sinas, for instance, both breached quarantine protocols in the past two months.

In his last statement on the incident, Sinas asked the public to "move on" from the issue as he himself had already moved on.

'Pasaway' narrative

On Sunday, the Palace called on the public to "cooperate" with quarantine protocols when Metro Manila shifts to GCQ.

Government officials have said on separate occasions that the responsibility of organizing shuttles for workers as well as testing them before going back to work, would be on employers.

11. ‘Disappointed, dismayed, appalled’: Businessmen hit public officials’ quarantine violations By John Ezekiel J. Hirro Pressone May 31, 2020

Business groups released a joint statement Sunday calling out the double standard in the implementation of quarantine measures, saying public officials had violated the rules with impunity instead of “serving as role models in discipline.” 42

The groups also said “different interpretations” of quarantine rules had led to unwanted quarantine violations, which Interior Secretary Eduardo Año on May 28 said reached over 184,000, of which 54 percent were apprehended, 9 percent were given warnings and 37 percent were fined.

“Unfamiliarity with new rules” led to many suffering detention, unnecessary costs, humiliation, inconveniences and even unwarranted jail time, which further caused economic burdens, according to the business groups.

“Above happened even with the Supreme Court’s circulars that reduce bail and allow recognizance as among the means of releasing the accused. The compounding economic hardships and unfamiliarity with the new rules resulted in many people languishing in detention centers for many days, thus risking exposure to the virus in overcrowded facilities,” the statement read.

The business groups recalled the warning of Metro Manila police chief Debold SInas, that police would “arrest those who will not follow the guidelines.”

The police general was shown partying in viral photos on his birthday last May 8, despite the prohibition on mass gatherings, but still received support from the President.

“We are therefore greatly disappointed — even appalled and dismayed — about news reports of public officials violating with impunity the IATF and DOH protocols intended to protect public health,” the groups said.

They said leaders at the national and local levels should “demonstrate beyond doubt, the highest standards in observing and enforcing the rule of law, and serve as role models in discipline and moral ascendancy” amid the pandemic.

The joint statement was penned by the American and Canadian chambers of commerce of the Philippines, Financial Executives Institute of the Philippines, Institute for Solidarity in Asia, Inc., Institute of Corporate Directors, Judicial Reform Initiative, the Management Association of the Philippines and the Makati Business Club. John Ezekiel J. Hirro

12. “Metro shifts to more relaxed quarantine” By Ma. Reina Leanne Tolentino and Anna Leah E. Gonzales THE MANILA TIMES June 1, 2020

Metro Manila transitions to general community quarantine (GCQ) today, Monday, allowing the reopening of more businesses and phasing in public transport in anticipation of a surge of people going back to work after a two-month lockdown.

The GCQ will be in force until June 15. 43

Several other areas were placed either under GCQ or modified GCQ.

Palace spokesman Harry Roque Jr. said in a statement on Sunday that, as more sectors and industries begin to operate, “Let us continue cooperating with authorities in enforcing quarantine protocols.

Let us take care of each other by wearing face masks/face shields, maintaining physical/social distancing, staying at home if/when need be and avoiding crowded places, and the like. Only then we can heal and rise as one.”

Under the GCQ, there will be modified checkpoints and quarantine passes will not be required. Those who are below 21 years old and those 60 and above must stay home.

The return of mass transportation will be in two phases.

From June 1 to June 21 only trains and bus augmentation, taxis, transport network vehicle services, shuttle services, and point-to-point buses will be allowed, and only at reduced passenger capacity.

Provincial buses will not be allowed to enter the metropolis.

In the second phase, public utility buses, modernized public utility vehicles (PUVs), and UV Express will be allowed with limited passenger capacity.

Dine-in restaurants and fast food establishments can also reopen, but under strict restrictions such as physical distancing, No-mask-no-entry policy; regular sanitation schedule; and alternative methods of payment.

Based on Department of Trade and Industry guidelines, there will be no buffet and self- service areas for food bars, condiments and utensils.

Interior Secretary Eduardo Año said on Sunday the easing of restrictions would enable the government to “slowly restart” the economy which has been battered by the coronavirus pandemic.

In a separate statement, Police LtGen. Guillermo Eleazar, chief of Joint Task Force Covid-Shield, said travel between two provinces requires authorization.

Workers and other individuals listed as APORs — authorized persons outside residence — do not need a travel authority but must present their company identification cards or other proof of employment.

The Philippine National Police has 4,354 quarantine control points and 115 dedicated control points for cargo vehicles nationwide, Eleazar said.

Business groups on Sunday expressed dismay that some public officials were “violating” the health protocols.

In a joint statement, the groups said while they support the “whole-of-government, whole-of-society” effort to respond and recover from the social and economic adversities caused by the pandemic, they are “greatly disappointed — even appalled and dismayed — by news reports of public officials violating with impunity the IATF (Inter- Agency Task Force for the Management of Emerging Infectious Diseases) and DoH (Department of Health) protocols intended to protect public health.”

The statement was issued by the American Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Institute for Solidarity in Asia Inc., Institute of Corporate Directors, Judicial Reform Initiative, Makati Business Club and the Management Association of the Philippines.

The business groups refused to disclose names.

The groups said the private sector had demonstrated utmost cooperation, and enjoined their own officers and employees to abide by quarantine rules.

“The impact has been much greater on families living near or below the poverty line, despite government’s extension of financial aid. Additionally, the seeming confusion and different interpretations of rules led to numerous quarantine violations,” they said.

The joint statement noted that from March 17 to April 17, almost 30,000 violators had been arrested; 6,616 underwent inquest while 23,016 cases were for filing.

Articles/Papers from MAP Members

1. “How to catch investment fallout from China” from MAP Tax Committee Chair ALEXANDER B. CABRERA’s “As easy as ABC” Column in THE PHILIPPINE STAR on May 31, 2020

When word got out that Japanese investors are looking at pulling back from China, word also got out that the Philippines was not their preferred investment destination.

To be honest, I felt that can’t be right, because how can the country that led Southeast Asia in growth rate for the better part of the decade be not the favorite?

We can’t be too opinionated on these things so we did a survey among Japanese executives in the Philippines. If you believe that it should have been done at the headquarters level in Japan, you are right, and that can be in the works, but the luxury of time is not on our side. Besides, the Japanese executives here, or elsewhere, are quite in touch with the thinking of their head offices in Japan. Sometimes, they are faulted as acting in unison, earning them the term of endearment, Japan Inc.

The survey results for me do not cast the Philippines in a bad light. It is anyway still their number two business destination of choice, but next to Vietnam, which takes top spot. Still, Vietnam can absorb a lot and there is still a lot that we can miss out on.

They cite labor costs still as one of the attractions for doing business here. However, they now cite the rising costs of doing business in the country as one of the reasons why a small but sizable percentage of them are looking at moving out. Pre-COVID-19, only five percent of them had definitive plans of moving out, but this doubled to 10 percent after they experienced the COVID- 19 environment in the Philippines. Lockdowns and strict quarantine rules in the country did take its toll on everyone, and they simply could not operate like they do in Japan, where there are no lockdowns just emergency measures.

While 90 percent of them are not saying they will leave, everyone is evaluating their next strategy. From the survey, pre-COVID-19, 36 percent of them have plans of expanding or introducing new products, but even that will be up in the air in the new COVID-19 environment. Private enterprise is still reimagining the possible and other economies in Southeast Asia are looking at how to lure investors. How Philippine policy transforms and impacts the cost of doing business in the Philippines is as crucial as ever before.

While the country has struggled with ease of doing business, it is almost ironic that one of the top reasons that makes the Japanese community stay here particularly those in the zones, is ease of doing business. The One Stop Shop Center of the Philippine Economic Zone Authority (PEZA) is a gem for them. Dealing with one agency of the government makes all the difference.

This taxation at a gross income tax (GIT) rate in lieu of all national and local taxes is thus key. Real property taxes should be factored in that one GIT rate. If they deal with the local government on real property taxes that are attached on their buildings, improvements and machineries, that one-stop-shop effect and ease of doing business as a model will disintegrate.

For domestic market enterprises, ease of doing business will still be a journey, but doing business has received a positive boost in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which immediately lowers the 30 percent tax to 25 percent (eventually going down to 20 percent by 2027).

For most of the respondents (63 percent), however, they operate inside the zones and serve the export market for the country. They cite that the key incentives for them are the five percent GIT, tax and duty-free importation, VAT exemption and income tax holiday, with the five percent GIT as the most important.

This brings us to the other part of the CREATE bill, which deals with incentives for the broad export or dollar-earning sector. CREATE increases that five percent GIT to 10 percent effective 2023, when the first sunset period of four years expires. About 80 percent of respondents will fall under the four years sunset period category because they have been registered for more than 10 years. From our data, the 10 percent tax based on gross income can easily be more than the 25 percent tax based on net income. As such, the 10 percent GIT will not be an incentive at all. Simply put, there will be no income tax incentive anymore after the sunset period.

We should be reminded that those serving the export market are not competing with those serving the domestic market in our economy. And if we’re talking about contributions to the Philippine economy, apart from taxes, the employment card should never be understated. We know that the government’s ability to provide welfare is quite limited. It needs the private sector to provide employment, retain local purchasing power and regain domestic market vibrancy. It’s all connected, especially with export zones providing direct and indirect employment to nine million workers, easily supporting 30 million of our more than 100 million population.

The opportunity is still golden. It’s not only about supporting domestic market enterprise. We cannot start leaking at the export sector. In the new normal, winning begins at home. If we want investors to come here, we must keep those who are already here. What is good for them, is good for any newcomer. Keep them, and we keep our hopes high about catching those investments from Japan Inc. or anyone, coming from the China fallout or otherwise.

* * *

Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He is the chairman of the Integrity Initiative Inc., a non-profit organization that promotes common ethical and acceptable integrity standards. Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

2. “No COVID-19 vaccine” from former MAP Governor PETER WALLACE’s “Like it is” Column in the PHILIPPINE DAILY INQUIRER on May 28, 2020

The COVID-19 pandemic is highlighting the mistake of regulating prices. The Department of Health (DOH) has issued Executive Order No. 104, which will reduce the price of some 133 of what it calls essential drugs by up to 50 percent. On top of this, the DOH is targeting to cut prices of another 72 products by 51 percent and up, to an incredible 96 percent. Obviously, this will result in great losses to the pharmaceutical companies. They will have to think seriously about whether to bring these drugs in at all. The last time the government forced price reduction on drug prices in 2009, one company withdrew from the market completely.

A subsequent review found that price reductions had insignificant impact. As I mentioned in my June 21, 2018 column, “Health is wealth,” simply forcing a reduction in prices doesn’t work. It was tried during the Arroyo administration when a law was passed. Five years later (September 2013), a study was conducted by the Philippine Institute for Development Studies (PIDS) funded by the DOH. Titled “The Impact of Cheaper Medicines Act on Households in Metro Manila: A Qualitative Study,” it was principally written by Dr. Eleanora de Guzman.

The study stated: “The Cheaper Medicines Act does not seem to have resulted in significantly reducing the financial burden of medicine costs among households. Respondents from all socioeconomic classes claimed that their expenditures for medicines were still heavy. The law has had little effect on low-income respondents (Class DE) who rarely buy branded medicines, but avail [themselves] of free medicines from government health centers or purchase low-cost generics.” In other words, the price reductions had insignificant impact on the consumer, particularly the consumer that matters, the poor—who don’t pay anyway, they get for free.

The COVID-19 pandemic has caught the medical industry without a vaccine or cure, and the urgent need to discover one. The industry is pouring huge amounts into research, amounts running into the billions of dollars. Billions that will have to be recovered. Since the investments are huge and lives are at stake, pharmaceutical companies have entered into partnerships even with competitor companies.

The cure and vaccine for COVID-19 will be an essential drug people must have. But under EO 104, because it is an essential drug, it will fall under price control. If the government excludes these COVID-19 cures and vaccines from the controlled list, what argument will it use? The medicines for diabetes and heart ailments, respiratory illnesses, and cancers are just as essential as COVID-19 cures, even more so as an estimated 300,000 deaths occur in the country per year as a result of these illnesses, versus 904 so far for COVID-19.

Their prices will be reduced by EO 104. So COVID-19 vaccines and cures must be, too. That will result in the suppliers of these COVID-19 drugs, where demand will outstrip supply, prioritizing other markets where they can be sure of recouping the huge cost of research. The Philippines will not get the expected relief from COVID-19.

It’s the case with many of the drugs on the list whose prices will be reduced: Suppliers will rethink delivery to the Philippines. And when other new ones are discovered—for cancer, for instance—EO 104 will result in the Philippines being last on the list to supply, if at all. You’ll have to travel overseas to get the drugs you need. But overseas travel is not a particularly enticing thought at the moment, and will not even be allowed for many months yet.

A disturbing side note on this is that EO 104 introduces price cuts at the wholesale level (MDWP) as well as at retail (MDRP). Why? The only concern of the DOH should be what the patient pays. Even stranger, some wholesale prices are cut, but the retail price isn’t. Wasn’t the whole point of EO 104 to help the patient? Take the price of Fluticasone (an anti-asthma drug) at P85 per pill; under the executive order, the reduced MDWP price will be P59.02, while MDRP will be 85. The net effect is zero reduction in retail price, while pharmacies benefit from a margin of 44 percent, significantly higher than the 10-15 percent they generally enjoy.

This is a very strange regulation that will do more harm than good. It’s a populist stance whose goal (lower prices) could be achieved in better ways. The DOH should meet with the manufacturers for pooled procurement and other ways that are mutually agreeable to achieve the same price reductions, without loss to the companies but with benefit to the patients. But it has declined to do so.

EO 104 should be canceled so we still get the essential drugs sick people need, and be on the list for COVID-19 vaccines and cures.

Email: [email protected]

“MAP Talks” on YouTube

The following videos are available under “MAP Talks” via the following link: https://www.youtube.com/user/TheMAPph

1. MAP Legacy Series 2019 on ANC featuring “MAP Management Man of the Year (MMY) 1992” ALFONSO T. YUCHENGCO

2. MAP Legacy Series 2019 on ANC featuring “MAP MMY 1996” DAVID M. CONSUNJI

3. MAP Legacy Series 2019 on ANC featuring Mr. WASHINGTON Z. SYCIP as “MAP MMY 1967”

4. MAP Legacy Series 2019 on ANC featuring Dr. GEORGE S.K. TY as “MAP MMY 2006”

5. MAP Legacy Series 2019 on ANC featuring Mr. HENRY SY, SR. as “MAP MMY 1999”

6. The MAP Lifestyle Masters on Living Well and Aging Well

Happy Birthday to the following MAP Members who are celebrating their birthdays within June 1 to 30, 2020

June 1 1. Mr. CARLO ROY “Carlo” SINGSON, Associate VP and Managing Director, NBA Philippines, Inc. June 2 2. Mr. RAUL M. CASTRO, Chair and CEO, McCann Worldgroup Philippines 3. Dr. CONRADO “Conrad” E. IÑIGO JR., VP - Academic Affairs, Lyceum of the Philippines University June 3 4. Atty. ENRIQUE “Ike” A. SOBREPEÑA JR., President and CEO, College Assurance Plan Philippines, Inc. 5. Mr. PETER WALLACE, Chair, Wallace Business Forum June 4 6. Mr. MANOLITO “Lito” T. TAYAG, Country Managing Director, Accenture, Inc. (Philippines) 7. Mr. WILLY YU TIENG, President, KLG International, Inc. June 5 8. Ms. MONA LISA “Lisa” B. DELA CRUZ, CEO, The Insular Life Assurance Company, Ltd. 9. Ms. MARIA CAROLINA “Carol” V. DOMINGUEZ, President and CEO, John Clements Consultants, Inc. 10. Mr. GEORGE J. MARTIREZ, 2nd Vice Chair and CEO, Malayan Bank 11. Mr. RUY Y. MORENO, Vice Chair, Center for Global Best Practices 12. Atty. CARLOS “Charlie” G. PLATON, Managing Partner, Platon Martinez Flores San Pedro and Leaño June 6 13. Mr. ROBERT “Bob” Y. COKENG, President, F & J Prince Holdings Corporation 14. Mr. RAMON LORENZO LUIS “Renzo” R. GUINTO, President and CEO, PH Lab/ Harvard University June 7 15. Mr. ROBERTO “Obet” DE VERA ROBES, President and General Manager, Sky Green Imports Incorporated June 8 16. Mr. MICHAEL “Mike” O. DE JESUS, EVP and Corporate Bank Head, RCBC 17. Ms. DELIZA GOZE RIDOLOSO, President, Pacific Sun Solutions, Inc. 18. Mr. JUAN CARLOS “John-C” L. SYQUIA, SVP and Head of Corporate Client Segment, BPI Capital Corporation June 9 19. Mr. ONOFRE “JR” BANSON JR., President, Monark Equipment, Inc. 20. Dr. EDUARDO “Ed” C. JIMENEZ, President, Kabalikat para sa Maunlad na Buhay Inc. (A Microfinance NGO) June 10 21. Dr. LUIS MARIA “Chito” R. CALINGO, President, Holy Angel University 22. Ms. EVELYN T. CARADA, EVP and General Manager, Fortune Life Insurance Company, Inc. 23. Mr. MANUEL ANTONIO “Manny” G. LISBONA, President, PNB Securities, Inc. June 11 24. Mr. SANDEEP G. CHANDIRAMANI, President, iGlobal Financial Services, Inc. 25. Atty. MARIAN JOANNE “Joanne” K. CO-PUA, Managing Partner, Bawar Co-Pua Law Offices 26. Mr. DENNIS B. FUNA, Insurance Commissioner, Insurance Commission June 12 27. Atty. ANTHONY ALDEN “Anton” SY AGUILAR, Senior Partner, The Tax Offices of Romero Aguilar & Associates 28. Sister MERCEDITAS O. ANG, SPC, President, St. Paul University Philippines (SPUP) 50

29. Atty. RAMIL E. BUGAYONG, Partner, PJS Law 30. Ms. HELEN PEREZ MACASAET, Chair Emeritus, Pentathlon Systems Resources, Inc. 31. Mr. ALEXANDER “Alex” N. VALORIA, President and CEO, Anflo Management and Investment Corporation June 13 32. Atty. ANTONIO “Tony” M. BERNARDO, ExCom Chair and Senior Partner, Bernardo Placido Chan & Lasam Law (BPCL Law) 33. Mr. ANTHONY “Anton” T. HUANG, President, Stores Specialists, Inc. June 14 34. Engr. BERNARDO “Bernie” F. ABIS, COO, Webcast Technologies, Inc. 35. Mr. JAIME “Jimmy” B. AQUINO, Chair, Comfac Global Group 36. Mr. ALVIN M. CARRANZA, CEO, Digital Out of Home, Inc. June 15 37. Amb. HARALD FRIES, Ambassador, Embassy of Sweden in the Philippines 38. Mr. RYAN C. GUADALQUIVER, Country Manager, SAS Institute Philippines, Inc. 39. Mr. GEORGE SYCIP, President, Halanna Management Corporation June 16 40. Mr. JAIME “Jimmy” I. CABANGIS 41. Ms. PATRICIA ANNE “Pixie” J. GUTIERREZ, Executive Director and Head of Corporate Communications, JP Morgan Chase & Co. June 17 42. Ms. KATRINA “Kat” LUNA ABELARDE, President and CEO, PLDT Global (Phils.) Corporation 43. Mr. MARIO “Mar” R. GATUS, President and CEO, DRAKE BEAM MORIN PHILIPPINES INC. doing business under the name and style of LEE HECHT HARRISON 44. Mr. ALFREDO “Jun” V. LAGMAN, President and CEO, Alen Group of Companies, Inc. 45. Ms. JANE FROILAN LOBOS, Associate Director, Standard Chartered Bank (Singapore) Limited 46. Mr. ANICETO “Chito” M. SOBREPEÑA, President, MetroBank Foundation, Inc. 47. Mr. RAOUL ANTONIO “Raoul” A. VILLEGAS, Executive Director - Deals and Corporate Finance, Isla Lipana & Co./ PwC Philippines June 19 48. Mr. JOSE “Joe” P. MAGSAYSAY, Chair and CEO, Prime Options June 20 49. Mr. PAUL JOSEPH “PJ” M. GARCIA, CEO, Leechiu Management, Inc. 50. Mr. RAFAEL “Paey” LLAMADO REYES, CEO, FIGS, Inc. June 21 51. Ms. LOURDES “Utchie” C. ANGELES, Managing Director, CHAMP Cargosystems Philippines, Inc. 52. Engr. EUSTAQUIO “Jun” T. CORONEL JR., President, ETCOR Construction Consultancy Corp. 53. Atty. PONCIANO “Jackie” V. CRUZ JR., Senior Partner, Santiago, Cruz & Sarte Law Offices 54. Mr. JUAN CARLOS “JC” O. MEDINA, COO, Human Resource Innovations and Solutions, Inc. (HURIS) June 22 55. Mr. ROBERTO “Bobby” W. ANSALDO, Project Director for Inclusive Growth Initiatives, Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. 56. Mr. ANTONIO “Tony” M. GARCIA, Chair and CEO, Chemphil Group of Companies 57. Mr. ROLANDO PAULINO “Roland” R. RUIZ, Managing Director, Development Dimensions International Philippines Inc. 58. Mr. JOHN ALLAN “John or Jojo” T. VINTA, President and COO, Micromatic Industries, Inc. June 23 59. Ms. ISABELITA “Eisa” PAREDES MERCADO, Chair and CEO, IPM Group of Companies June 24 60. Ms. FIDELINA “Faye” A. CORCUERA, Managing Partner and Chief Flamethrower, Kick Fire Kitchen (Kick Fire Curiosity Corp) 61. Mr. JJ SAMUEL “JJ” A. SORIANO, Chair, Soriano Projects & Ventures Group (SPV)

June 25 62. Ms. ALICIA RITA “Aleli” MORALES ARROYO, Managing Director, John Clements Consultants, Inc. 63. Mr. ROBERTO GERARD “Robert” L. NAZAL JR., President, YSA Skin Care Corporation 64. Mr. DEXTER “Dex” E. QUINTANA, President, Jolliville Holdings Corporation (JOH) 65. Mr. RENE R. REINOSO, President, DAGxpress Courier Inc. June 26 66. Mr. EMMANUEL “Manny” V. RUBIO, EVP - COO, Aboitiz Power Corporation June 27 67. Dr. VICTOR “Vic” A. ABOLA, Director, Strategic Business Economics Program, University of Asia and the Pacific 68. Mr. JESSIE C. CARPIO, Division Head, Audit & Assurance, P&A Grant Thornton 69. Ms. GERMAINE A. REYES, President and CEO, Synergy Market Research + Strategic Consultancy June 28 70. Mr. CALIXTO “Toti” V. CHIKIAMCO, Founder and CEO, MRM Studios, Inc. and Mobilemo. Inc. 71. Mr. MARTIN C. GUANTES, Partner, Assurance and Market Group 3 Leader, SGV & Co. 72. Dr. MARY GAW “SO, President, Rehub Real Estate, Inc. June 29 73. Mr. ANTHONY “Tito” L. FERNANDEZ, President and COO, First Balfour Inc. 74. Mr. MALONY “Malone” M. GUEVARRA, President, Alcon Laboratories (Philss.) Inc. June 30 75. Mr. ROQUE “Rocky” D. BACANI, Head, Corporate Technology and Transformation, MERALCO 76. Mr. ARSENIO “Archit” M. BARTOLOME III, Chair, AMBER Properties, Inc. 77. Atty. PERRY L. PE, Partner and ExCom Member, Romulo Mabanta Buenaventura Sayoc & de los Angeles

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