PH, Japan reaffirm commitment to better economic ties

Robie de Guzman   •   December 29, 2020   •   1041

MANILA, Philippines – The Department of Finance (DOF) reported that the Philippines and Japan have reaffirmed their commitment to further enhance economic partnership, which includes plans to expand Japanese investments in the country.

During a recent courtesy call on Finance Secretary Carlos Dominguez III, newly designated Japan Ambassador to the Philippines Koshikawa Kazuhiko said that Japanese companies are exploring ways of realigning their supply chains to other countries like the Philippines.

Koshikawa said the approval by the Senate of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill was welcomed by Japanese investors doing business in the Philippines.

The measure aims to lower the corporate income tax (CIT) for micro, small, and medium enterprises (MSMEs) with a net taxable income of P5 million and below to 20 percent, while other companies, including foreign firms, will pay a harmonized rate of 25 percent.

The current CIT, which is the region’s highest, is 30 percent.

Dominguez, for his part, said that aside from the CIT rate cut, CREATE will also allow the government to tailor fit incentives given to businesses so as to attract the kind of investors that it wants to invest in the Philippines.

The Finance chief also told the ambassador that the Philippines’ competitive edge in attracting foreign direct investments (FDIs) is its young working population, which complements Japan’s highly skilled labor force and makes the two countries ideal “demographic partners.”

During the meeting, Koshikawa also restated Japan’s continuing support for the Philippine government’s efforts to curb the spread of the coronavirus disease, as well as its disaster risk reduction and mitigation programs.

Citing the signing in September between the two countries of the 50-billion yen Post-Disaster Standby Loan (PDSL) Phase 2, the Ambassador reaffirmed Japan’s commitment to continue assisting the Philippines in its disaster risk reduction and mitigation programs.

Since the start of the Duterte administration in July 2016, 15 loan agreements totaling JPY679.296 billion (about P313.147 billion or US$6.443 billion) have been signed by Manila with Tokyo.

Before beginning his tour of duty in Manila, Ambassador Koshikawa was a senior official at the Japan International Cooperation Agency (JICA), and had served as Japan’s Ambassador to Spain and Angola.

BIR, DOF urged to extend deadline for ITR filing

Robie de Guzman   •   April 7, 2021

MANILA, Philippines – Senator Nancy Binay on Wednesday called on the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) to reconsider their decision not to extend the April 15 deadline for the filing and payment of annual income tax returns for the year 2020.

“I-extend na lang sana ang April 15 deadline, kahit na sa NCR Plus lang. We already extended last year dahil sa enhanced community quarantine. Nasa parehong sitwasyon tayo a year later, kaya hindi ko naiintindihan bakit hindi mapagbigyan,” Binay said in a statement.

BIR Deputy Commissioner Arnel Guballa on Monday said the bureau would not be extending the deadline due to the government’s need to reach its revenue targets to fund the pandemic response.

As a relief for taxpayers, Dulay said the BIR will allow the filing of a tentative ITR before the deadline and give them until May 15 to amend the returns without penalties.

If overpayment of taxes will be made on the revised ITRs, the bureau said taxpayers can either file for a refund, or choose to carry over the overpaid tax as a credit against the tax due for the same tax type in the following period.

But Binay said individual taxpayers and even micro and small businesses would find it difficult to comply, in the first place, given the restrictions on movement.

“Ang talo kasi rito iyong mga indibidwal at maliliit na negosyo na limitado ang kapasidad na kumpletuhin ang mga requirements dahil sa lockdown. So para sa kanila, walang bearing ang no-penalty amendments dahil baka mismong pag-file hindi nila magawa,” she said.

The senator also said that even corporate taxpayers would be pressed for time in adjusting their payments to the lower rates provided as relief by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which President Rodrigo Duterte only signed on March 26. The BIR released the law’s draft implementing rules and regulations on Tuesday.

Binay also stressed that a deadline extension does not mean non-payment.

“Hindi naman dahil extended ay hindi na magbabayad. Those who are able to will file and pay. Ang panawagan lang naman natin is not to penalize those who are unable to comply because of the difficulties presented by the lockdown,” she said.

Based on the BIR’s monthly collection goal, the agency aims to collect P235.237 billion in April.

The BIR said taxpayers or assigned officers can also use their electronic signatures in filing returns, attachments, and other documents needed, which will be considered as actual signatures.

It recently allowed taxpayers to file their returns and make payments anywhere, or even outside the area covered by Revenue District Offices where they are registered, without incurring penalties.

BSP issues digital banking license for Overseas Filipino Bank

Robie de Guzman   •   April 5, 2021

MANILA, Philippines – The Overseas Filipino Bank (OFBank) has officially become the first branchless digital-only bank in the country’s history after securing a digital banking license from the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the Department of Finance (DOF) said.

OFBank, a wholly-owned subsidiary of the Land Bank of the Philippines (LANDBANK), secured a digital banking license last March 25, the DOF said in a statement on Monday.

Prior to that, the bank was able to commence its banking operations in June last year using its then-existing license to operate as a thrift bank.

OFBank, under Executive Order (EO) No. 44 signed by President Rodrigo Duterte in September 2017, was created to establish a policy bank dedicated to providing financial products and services tailored to the requirements of overseas Filipinos.

“This milestone in the country’s banking history not only fulfills President Duterte’s campaign pledge to create a bank that caters to overseas Filipinos but will also help the Philippines leapfrog to the digital economy,” Finance Secretary Carlos Dominguez III said.

“When President Duterte said he would create a bank that would serve overseas-based Filipinos, he wanted a bank that would be a trailblazer in terms of modernizing and expanding the scope of the services it offers to them,” he added.

OFBank was launched virtually in June last year amid the COVID-19 pandemic as the Philippines’ first branchless and digital-centric government bank, the DOF said.

While fine-tuning its operations, systems, and processes to enable its official transition into a digital bank, OFBank operated as a thrift bank, the DOF said.

In December 2020, the BSP issued Circular No. 1105 containing the guidelines on the establishment of digital banks, clearing the way for OFBank to apply for a license as a digital bank.

OFBank offers four digital products and services that include a digital onboarding system with artificial intelligence (DOBSAI), which allows the real-time opening of a mobile banking deposit account on supported iPhone or Android devices.

Aside from deposit savings accounts, OFBank’s digital services also include fund transfers, bill payments, and applications for multi-purpose loans, the DOF said.

OFBank’s global digital reach spans 112 countries, with its clients able to access online the services of 763 merchants onboarded in its mobile application via the LinkBiz.Portal, it added.

Napocor, Transco eye electrification of 30K unserved, off-grid areas this year

Robie de Guzman   •   March 26, 2021

MANILA, Philippines – State-owned National Power Corp. (Napocor) and the National Transmission Corp. (Transco) are looking to add 45.31 megawatts of power capacity, 71.3 circuit kilometers (km) of transmission lines and build 45.0 MVA substation facilities this year to provide electricity to some 30,000 unserved households, the Department of Finance (DOF) said.

In a report to Finance Secretary Carlos Dominguez III, Napocor said it will also add 11 Small Power Utilities Group (SPUG) plants providing 24/7 electricity to unserved areas, as part of its missionary electrification project in 2021.

As of end-2020, Napocor said that 1,080,242 households in missionary areas already have electricity while 473,845 remained unserved.

Despite the work suspensions due to several powerful typhoons and the COVID-19 pandemic last year, Napocor said it was able to surpass its 2020 target of providing electricity to unserved areas by 8,587 households for increase in operations and 2,433 households for new areas.

Napocor said it plans to narrow this gap this year by providing electricity to 28,972 households, which will cut its backlog on unserved areas to 444,873 households.

Meanwhile, the DOF said that Transco targets to complete the power development plan (PDP) for the interconnection of unserved and underserved island municipalities this year.

“It is expected to come up with the studies and plans that will provide the general framework for the interconnection, by the end of the year,” the DOF said in a statement.

The department added that Transco also eyes to complete its PDPs for the Palawan island grid and implement the PDP for the Cagayan Economic Zone Authority this year.

As of September 2020, Transco’s current assets amounted to P10.59 billion, up by 20 percent from the previous year’s record of P8.83 billion. Its total assets–comprising receivables, trust assets, plants, and equipment—dropped 2.8 percent from P326.39 billion in 2019 to P325.31 billion in 2020.

Transco reported budgetary savings of P503.86 million in 2020, with the bulk of its unspent funds coming from unrealized capital expenditures of P360.12 million. The firm collected P108.96 million in right-of-way (ROW)-related capital expenditures last year and filed 76 expropriation cases.

As of end-2020, Transco’s cash and investment balance amounted to P1.22 billion.

Preliminary data show that Transco has identified around P31.18 million from discontinued, deferred, or reduced programs and activities for COVID-18 related expenditures and disbursed P24.16-million of this amount, the DOF said.

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