Philippines, World Bank ink $100-M loan accord for COVID-19 emergency response project

Robie de Guzman   •   April 29, 2020   •   564

MANILA, Philippines – The Department of Finance (DOF) on Tuesday announced that the Philippines has signed a $100-million loan agreement with the World Bank to strengthen the country’s COVID-19 emergency response project (ERP).

In a statement, the DOF said that the loan deal was signed by Finance Secretary Carlos Dominguez III and World Bank acting country director for Brunei, Malaysia, the Philippines and Thailand Achim Fock on April 28.

The DOF said the loan accord aims to strengthen the country’s capacity to prevent, detect and respond to the threat posed by the novel coronavirus disease (COVID-19) pandemic and boost its national systems for public health preparedness.

The $100-million loan deal follows an earlier agreement signed by Dominguez and Fock for the $500-million Third Disaster Risk Management Development Policy Loan (DRM DPL3) that aims to augment the Philippine government’s urgent financing requirements in dealing with the COVID-19 pandemic.

“The World Bank has again acted swiftly to help developing economies like the Philippines meet the ever-increasing demand for medical care and health facilities resulting from the coronavirus-induced global health crisis. We thank the World Bank once again for supporting our efforts to contain the spread of the virus and expand our capacity to prevent and prepare for emerging infectious diseases in the future,” Dominguez said.

In approving the COVID-19 ERP loan, Fock said “boosting the [Philippines’] capacity to respond to COVID-19 will save lives.”

“The government has taken quick and decisive action in the fight against the COVID-19 pandemic and the World Bank is proud to support its efforts. Right now, no other investment offers greater return,” Mr. Fock added.

According to the DOF, the COVID-19 ERP consists of the following components:

  • Strengthening the country’s emergency COVID-19 health care response efforts;
  • Strengthening laboratory capacity at the national and sub-national levels to support the prevention of, preparedness against, and response to, emerging infectious diseases;
  • Implementation management and monitoring and evaluation; and
  • Contingent emergency response.

The COVID-19 ERP, to be implemented by the Department of Health (DOH), will support the Philippine government’s efforts in the procurement of medical and laboratory equipment and reagents; medical supplies, including personal protective equipment (PPEs), medicines and ambulances; and isolation and quarantine facilities.

The World Bank may also provide proactive assistance in accessing existing supply chains through its Bank-Facilitated Procurement (BFP) to assist the DOH in implementing the project, “which will be beneficial considering the current disruptions in the usual supply chains for medical consumables and equipment for COVID-19 response,” the DOF said.

An earlier statement issued by the World Bank said the COVID-19 ERP loan also aims to expand the Philippines’ laboratory capacity by, among others, retrofitting the Research Institute for Tropical Medicine (RITM) along with six sub-national and public health laboratories in Baguio, Cebu, Davao, Surigao City, and Manila; and finance the construction and expansion of laboratory capacity in priority regions that currently do not have these facilities.

The department also said that this project loan will likewise support the efforts of the DOH in coming up with design standards for hospital isolation and treatment centers in managing patients with Severe Acute Respiratory Infections (SARI), which will be used in health facilities across the country to ensure the consistency of quality and standards in delivering COVID-19 healthcare services.

The loan carries a maturity period of 29 years, inclusive of a 10-and-a-half-year grace period.

It will be fully financed by the World Bank with no counterpart funding needed from the Philippine government.

The DOF expects the effectiveness of the ERP loan and the project implementation to commence in early May.

Bureau of Customs steps up drive vs rice smuggling

Robie de Guzman   •   September 23, 2020

MANILA, Philippines – The Bureau of Customs (BOC) is ramping up its campaign against rice smuggling even amid the novel coronavirus disease (COVID-19) pandemic by conducting raids on warehouses suspected of storing illegally imported grains following reports from concerned citizens, the Department of Finance (DOF) said.

In a statement on Tuesday, the DOF said that Customs Commissioner Rey Leonardo Guerrero has assured Finance Secretary Carlos Dominguez III that rice stocks imported by private traders during the pandemic would still be subject to “post-modification and post audit.”

This system will ensure that undervalued shipments are properly assessed and subsequently paid with the correct amount of duties and taxes.

Guerrero also said he had informed the Federation of Free Farmers (FFF) that because rice is considered a “critical” commodity, traders were allowed to avail of the Provisional Goods Declaration in processing their shipments at this time of the coronavirus pandemic.

The FFF earlier questioned the BOC’s assessment and valuation system on the entry of rice imports.

“The BOC has found the valuation of several rice shipments with provisional goods declaration to be quite low compared to the prevailing market prices,” Guerrero said in his report to Dominguez.

“But those are subject to post-modification and post-audit. And in the meantime, we are still conducting the post-modification, verifying the payments of rice because some of them are clearly undervalued. So we will catch up in the post modification and post-audit,” he added.

Under Customs Memorandum Order (CMO) No. 07-2020, if the Customs district/sub-port collector accepts a provisional goods declaration, the duty and tax treatment of the goods under provisional declaration will not be different from that of goods with complete declaration.

For the release of shipments under tentative assessment, the importer will be required to post the required security, whether in the form of surety bond or cash bond.

Guerrero said the customs bureau has also responded to reports by concerned citizens regarding warehouses suspected of storing smuggled rice stocks by immediately issuing letters of authority to enable BOC officers to inspect such warehouses and seize goods without the requisite importation permits.

“We actually raided them and we found out that many of these warehouses were operating legally and their stocks are covered by proper documents,” Guerrero said.

Philippines, Japan ink 50-B yen standby loan deal for post-disaster efforts

Robie de Guzman   •   September 16, 2020

MANILA, Philippines – The Philippines and Japan signed an agreement for a 50 billion yen (around P23.3 billion) standby loan which aims to quickly disburse funding support for the government’s response to national calamities or health emergency, the Department of Finance (DOF) said.

In a statement, the DOF said Finance Secretary Carlos Dominguez III and Japan International Cooperation Agency (JICA) Chief Representative Eigo Azukizawa signed the deal Tuesday on the second phase of the post-disaster standby loan (PDSL).

Under this agreement, the DOF said the disbursement of the standby loan to the Philippines will be triggered by either of the following circumstances: the declaration of a state of calamity; or the declaration of a state of public health emergency.

In the case of the current COVID-19 pandemic or any other public health emergencies, the imposition of an enhanced community quarantine (ECQ) or its equivalent in the National Capital Region (NCR) or in any other highly urbanized area in the country will also trigger the disbursement of the loan, it added.

“The ongoing pandemic underscores the need to further improve our policy and institutional framework for disaster risk reduction and management. It likewise emphasizes the need to build our financial resilience against disasters and similar emergencies,” Dominguez said during the ceremonial signing of the loan deal at the DOF office in Manila.

The loan will be available for quick disbursement in tranches within three years once it is declared effective. It may be extended for an additional three-year period for up to four times.

The financing package under PDSL carries a fixed interest rate of 0.01 percent with a maturity of 40 years, inclusive of a 10-year grace period.

Japanese Ambassador to the Philippines Koji Haneda welcomed the agreement, saying that “as a calamity prone country like the Philippines, Japan fully understands the value of safeguarding lives, infrastructure and livelihood.”

The signing of this loan accord comes after a separate 50-billion yen loan inked by both countries in July for the COVID-19 Crisis Response Emergency Support Loan, which aims to assist the Philippine government’s efforts to contain the spread of the coronavirus disease and aid Filipinos most affected by the pandemic.

DOF, BIR to allow taxpayers to settle 2018 tax deficiencies sans audit

Robie de Guzman   •   September 7, 2020

MANILA, Philippines – Taxpayers who have yet to pay their liabilities will now be able to settle them without an audit, the Department of Finance (DOF) said Monday.

In a statement, the DOF said it has issued Revenue Regulations No. 21-2020 for the implementation of the Voluntary Assessment and Payment Program (VAPP) for the taxable year 2018.

“The VAPP allows taxpayers to voluntarily pay their unpaid internal revenue tax liabilities–with or without an ongoing audit of or investigation into their finances– and those who do so will no longer be audited or investigated for 2018 for the tax types availed,” it said.

The finance department said the VAAP program covers all internal revenue taxes due for the taxable year ending December 31, 2018, and for fiscal year 2018 ending on the last day of July 2018 to June 2019.

It likewise covers one-time transactions (ONETT) such as the payment of estate taxes, donor’s taxes and capital gains taxes (CGT), as well as ONETT-related creditable withholding taxes (CWT) or expanded withholding taxes and documentary stamp taxes (DST), it added.

The DOF, however, said that taxpayers who wish to avail of the VAPP must generally pay the higher of a certain percentage of 2018 gross sales or 2018 taxable net income, based on the increase or decrease in total taxes paid from taxable years 2017 to 2018, subject to minimum amounts based on subscribed capital.

The department expressed hope that the program will increase its tax collections while providing taxpayers an easy and affordable way to settle their unpaid tax deficiencies.

The program will run until December 31, 2020, the DOF said.

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