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BSP to get strict on banks’ reports

Tuesday, 27 June 2017 00:00 Published in Business

A new circular will soon be issued by the Bangko Sentral ng Pilipinas (BSP) to improve the preparation and submission of supervision reports by banks.
BSP deputy governor Nestor Espenilla Jr. said the issuance, which has been approved by the central bank’s policy-making Monetary Board (MB) “is a very important circular” since some banks err in reports submission since penalties are small.
“It makes it very clear whose responsibility it is all the way to the board to make sure that the data being submitted to the BSP is accurate and based on the requirements of the BSP,” he said.
The incoming BSP chief said the new circular would clearly state the obligations of central bank-supervised institutions such as on-time submission of reports, and also identify additional sanctions for failure to meet the requirements.
He said the new circular “strengthens the framework for high-quality data submission to the BSP.”
“Data is very important for the BSP because it’s the foundation of policy-making,” he stressed.
Espenilla said there were lots of banks that failed to meet the deadline of filing of reports due to several reasons such as not realizing the importance of their reports, opting to just pay the penalty instead of meeting the deadline while others were challenged to provide high-quality data.
He said the new circular would cover all banks, citing also that the central bank’s collection of penalties from late submission of reports would be big.
“This one basically means (that) if you keep doing it (late submission of reports), you’re not just looking at penalty but other kinds of sanctions including holding accountable the individual officers, (who will be) suspended or disqualified if it’s (late submission is) really persistent, and seemingly intentional,” he added.

AIIB to help RP fund metro flood project

Tuesday, 27 June 2017 00:00 Published in Business

China-led Asian Infrastructure Investment Bank (AIIB) has agreed to co-finance the first phase of the Metro Manila Flood Management Project.
This was disclosed by Finance Secretary Carlos Dominguez, who represented the Philippines in the AIIB meeting in Jeju Island, South Korea early this month.
Dominguez said he attended the meeting, which is the first for the Philippines, primarily not to ask for financing but as part of bank’s stakeholder.
Members of the AIIB are required to put in capital and the Philippines, for one, is allowed to take out about $200 to $500 million worth of loans annually.
Dominguez dubbed as a “good progress” the operations of the AIIB, which was established in October 2014.
“It is a learning process for us and quite frankly we are very happy with what we hear about the AIIB. They run a very lean organization,” he said.
“With regards to our own negotiations with them we have concluded one negotiation wherein they will co-fund the Metro Manila Flood Management Project Phase 1,” he said.
Dominguez said AIIB and the World Bank (WB) would put in about $207.63 billion each for the project while the Philippine government shares around $84 million.
He is confident that the government will have the necessary funds to construct the flood management project, especially since it targets to finance all its infrastructure projects and just bid out the projects’ final construction phase and the operations and maintenance.
“You have to remember that the Philippines is not where it was 10 or 25 years ago. We have a variety of sources of funds and we have the luxury of choosing the sources with the best conditions for us,” he said.
Among the government’s financing options are commercial borrowing, both onshore and off-shore, and loans from multilateral agencies.
“Our economy is very liquid,” he said, citing that this bodes well for government’s funding requirements, which has been set at 80-20 ratio in favor of domestic borrowing.
“Now, we can pick and choose and we can blend so that we come out with the best terms, which are basically the lowest cost, the longest payback periods and the longest periods where we don’t have to pay anything,” he added.

Group rallies support for DU30 tax campaign

Tuesday, 27 June 2017 00:00 Published in Business

Action for Economic Reforms (AER), a policy advocacy group, is urging Filipinos to vigorously support the Duterte administration’s proposed Tax Reform for Acceleration and Inclusion Act (TRAIN) now pending in the Congress that aims to dramatically raise public investments in the country’s future, instead of allowing themselves to be swayed by groups that wrongly oppose badly needed reforms “in the guise of protecting the poor.”
According to AER, the Philippines is now at a “critical juncture” in which the government has a “win-win” measure that will allow it at last to spend big on the people’s welfare by adopting a holistic approach to tax policy and administration reforms.
“The holistic approach of connecting the sources of financing to the use of funds makes the tax reform a win-win measure to address injustice and inequality. We all have to contribute what we can to building our nation while the government’s role is to redistribute resources to ensure that those who have little will have more. No one needs to be left behind,” Jo-Ann Latuja Diosana and May-i Fabros of the AER said.
According to these AER officials, the TRAIN, which comprises the first package of the government’s Comprehensive Tax Reform Program (CTRP), is no different from the Sin Tax Reform Law, which was similarly met with public opposition at first amid efforts by its critics to portray it as a revenue measure that will hurt the poor in terms of higher-priced cigarettes and alcoholic drinks.
“We only need to rise above the noise of those who are opposing in the guise of protecting the poor,”Diosana said in a statement released during a recent tax forum.
“In the case of the Sin Tax Law, they let the poor farmers compete with the sick and the dying. Now with the pending TRAIN, they are once again hinting at how the middle class will be liberated at the expense of the poor,” they said.
Today, however, the public recognizes the importance of the Sin Tax Reform Law and its benefits, and views it not just as a revenue generating measure but a policy that helps us make healthier lifestyle choices for ourselves and our families, the AER officials said.
They said that TRAIN’s popular proposals, such as the lowering of personal income tax rates and the lifting of bank secrecy laws are easy to support. But the bill’s other provisions that aim to raise more funds for infrastructure and social services are usually met with divergent views.
Diosana and Fabros said retaining the economic status quo will enable the country to survive but will also mean lost opportunities in significantly improving the lives of ordinary Filipinos and rescuing more of our countrymen from poverty.
“If we desire to pull more of our impoverished countrymen out of poverty; if we dream that more Filipino families need not be separated just so some of their members can find work abroad; if we envision a Philippines that is more inclusive, with its islands and provinces closely linked by roads, bridges, and trains, the more vividly we will see that all we need to sacrifice is loose change,” they said.
‘We lose when we refuse to participate and push for the passage of a measure that can slowly shape our communities to be healthier and more sustainable and raise the much needed revenue for development programs that are known to jump start addressing poverty and inequality — education, health, infrastructure and social protection,” they said.
“We are at a critical juncture. We now have the opportunity to not just spend for the present, but also invest for the future. The question is ‘How much are we willing to invest and how much are we willing to risk?’ All investments have risks. The bigger the investment, the bigger the risk; but also, the bigger the returns,” they said.
Earlier, over 200 representatives of nongovernment organizations and other civil society groups, which include the AER, have called on the two chambers of the Congress to “swiftly pass” TRAIN, which, they said, would spell the long-overdue correction of the country’s tax system and complement initiatives for transparency and participatory governance leading to sustainable growth and development.
They belong to an umbrella group — the Open Government Partnership (OGP) — consisting of 66 people’s organizations, civil society and academic groups, public sector unions and business chambers who attended the two-day Open Government Dialogues, which was organized by the Departments of Budget and Management (DBM) and of Finance (DOF) with the support of the United States Agency for International Development (USAID), Union of Local Authorities of the Philippines (ULAP) and other groups last month.

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