Consumer confidence improved in Q1

Bangko Sentral ng Pilipinas. INQUIRER.net FILE PHOTO

Consumer sentiment in the first quarter of 2015 improved to its best level in over a year, as fewer households tightened their belts, a new central bank survey showed.

Results of the Bangko Sentral ng Pilipinas (BSP) Consumer Expectations Survey (CES) showed pessimism was at its lowest point since the third quarter of 2013. More families expected consumer goods to stay cheap, more jobs to be available, and their own savings to improve, all while enjoying continued government support.

Confidence was still in negative territory at -10 percent, but it improved significantly from the -21.8 percent recorded in the fourth quarter of last year. The final confidence score is the difference between pessimists and optimists, which means more people were pessimistic than those that had high hopes.

“The improvement in consumer outlook was broad-based and evident across income groups with the middle-income group showing the biggest improvement in sentiment, followed by the low-income group,” the BSP said in a report released over the weekend.

Index scores for consumers have never entered the positive territory in the survey’s history.

According to respondents, their improved outlook during the current quarter was due to expectations of lower oil prices and stable prices of commodities, higher family income leading to more savings, availability of more jobs and increase in the number of employed family members, the appreciation of the peso, and improvement or development of public infrastructure.

Respondents also cited less calamities, less corruption in the government and more assistance from the government such as the Pantawid Pamilyang Pilipino Program (4Ps), as factors for their improved outlook, the BSP said.

This quarter’s CES survey covered 5,818 families drawn from the Philippine Statistics Authority (PSA) Master Sample List of Households. It is considered a representative sample of households nationwide.

There are three indicators in measuring consumer confidence: The country’s economic condition, family financial situation, and family income.

Consumer confidence on the country’s economic condition and family financial situation picked up for the current quarter.

Notably, economic condition registered the biggest improvement in index scores, followed by family finances. The outlook on family income in the current quarter was more sanguine, the BSP said.

“These indicate households’ growing confidence in the country’s economic condition and their own family finances,” it said.

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Asean officials keen on regional TIN

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Top finance and central bank officials of the Association of Southeast Asian Nations support moves to come up with a regional tax identification number (TIN) in line with plans to harmonize taxation policies as well as strengthen compliance monitoring across member-states.

“We acknowledged the progress of work of the Asean Forum on Taxation (AFT), particularly in the continuous efforts to complete a network of bilateral tax agreements, to improve exchange of information for tax purposes, and to enhance members’ cooperation on capacity-building on taxation matters. We also welcomed AFT’s plan to further discuss other areas under taxation, including the feasibility study of the global TIN scoping proposal, base erosion and profit shifting issues, and to explore possible ways on tax harmonization,” read the joint statement issued following the First Asean Finance Ministers’ and Central Bank Governors’ Meeting in Kuala Lumpur, Malaysia last week.

Finance Secretary Cesar V. Purisima earlier said the country was pushing for the establishment of an Asean TIN, similar to the Asia-Pacific Economic Cooperation or Apec TIN also being proposed by Manila in the trans-Pacific grouping.

During the meeting, Southeast Asia’s finance ministers and central bank governors also committed to “strengthen economic growth and promote financial stability in the Asean region, amid uncertainties in the external environment.”

They noted that Asean’s economy grew by 4.4 percent last year despite global challenges, as “[d]omestic demand in our economies has remained resilient, supported mainly by private consumption.”

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$6.7-M Avion transmission link OKd

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A First Gen Corp. subsidiary is undertaking a transmission project to enable upcoming power stations in the Lopez Group’s gas-fired generation plant complex in Batangas to supply the Luzon grid.

Prime Meridian Powergen Corp. (PMPC), a unit of First Gen, has applied for a $6.7-million point-to-point transmission facility, which will be finalized in 2016.

This will connect the upcoming 90- to 115-megawatt (MW) Avion and the 434-MW San Gabriel projects to the existing switchyard of the 1,000-MW Santa Rita power plant.

First Gen president Giles Puno has told reporters the company wants to fast-track the 97-MW Avion natural gas-fired project this year to address the power supply shortage in Luzon.

Avion may be completed around May. If it is, the power station could be on full commercial commissioning by June.

First Gen is also progressing with the construction of the 434-MW San Gabriel natural gas plant to be operational in the summer of 2016.

To test, commission and dispatch the plant soon after completion, PMPC proposed an interim connection through the Santa Rita switchyard to the system of the National Grid Corp. of the Philippines (NGCP).

Avion will ultimately be connected to the switchyard of the 500-MW San Lorenzo plant as San Gabriel is connected to the same switchyard. That will be the final connection, which is expected to take place in 2016.

ERC approved the application, saying the point-to-point connectivity is allowed under law and that NGCP has found the connection to be “technically feasible.” Riza T. Olchondra

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Gov’t budget to cover spending on climate change initiatives

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Spending on climate change initiatives will be tightly woven into the budget process and will be more closely monitored by the government.

According to Joint Memorandum Circular No. 2015-01 issued by the Department of Budget and Management (DBM) and the Climate Change Commission on March 24, “performance indicators specific to climate change expenditures shall also be formulated in sync with the National Climate Change Action Plan.”

The National Climate Change Action Plan outlines the climate change adaptation and mitigation strategies for the years 2011-2028, with the ultimate goal of building adaptive capacities in communities, increasing the resilience of vulnerable sectors as well as natural ecosystems, and optimizing mitigation opportunities towards sustainable development.

According to the circular, the government would track, monitor and report all climate change programs, projects and activities so that oversight and line department managers can monitor climate change-related expenditures.

As “all climate change-related strategies and investments of the government shall be identified as adaptation and mitigation,” expenditures on such initiatives will have to be tagged in the Online Submission of Budget Proposal, National Expenditure Program, and the General Appropriations Act.

All government agencies are therefore required to identify and tag climate change expenditures, while the DBM is tasked to ensure the readiness of the tagging systems.

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Tax payment ordeal

Ahead of the April 15 deadline for the filing of individual income tax returns, the Bureau of Internal Revenue has come out with print and TV advertisements encouraging the citizens to pay the correct taxes.

The action is part of the “Angat Pa, Pinas!” tax campaign it launched last month to make Filipinos look at tax payment “as an opportunity to help the poor and develop the country to make it economically viable and strong.”

This year’s media blitz has a positive and nationalistic tone. The TV advertisements show people putting concrete blocks to construct a bridge and a hospital.

This approach is in sharp contrast to last year’s “shame campaign” where the BIR made it appear doctors, accountants and lawyers piggy-backed on the taxes paid by low salaried public school teachers.

It did not come as a surprise that the tax cheat tag riled the professionals concerned, especially the doctors. They decried the BIR’s publicity stunt as unfair and erroneous.

The unorthodox strategy and sharp reaction to the advertisements fanned public discussion of the lopsided nature of our tax system.

As a result, the professionals’ organizations met with the BIR to discuss the manner by which their members can comply with their tax obligations.

National budget

The BIR has a tough collection target this year. The 2015 national budget requires more or less P2.6 trillion in revenue to accomplish its projects.

Some P1.7 trillion, or 73.6 percent, of those revenues are assigned to the BIR to collect. Of this amount, P1.03 trillion (or 60 percent) are expected to come from income taxes, P372.4 billion from sales taxes and the rest from other taxes.

The April 15 tax collection is considered the barometer of the BIR’s ability to meet its annual targets. If the tax take is substantial, there is less pressure to intensify collection efforts; otherwise, the BIR would have to look for other sources to make up for the expected shortfall.

Convincing taxpayers to pay their taxes is not easy. Whenever possible, taxpayers will take advantage of the loopholes in the tax laws to avoid [which is legal] or evade [which is illegal] the payment of taxes.

For most Filipinos, money paid as taxes is money that could otherwise pay for the basic necessities or pleasures of life.

So in April, the services of lawyers or accountants who know how to game the tax system are in demand.

Preparation

The desire to be patriotic in the payment of taxes further loses its appeal amid reports of lawmakers diverting billions of pesos in public funds to their pockets, or government officials treating their budgets as piggy banks to maintain their lavish lifestyles.

As if the lack of motivation to pay taxes is not bad enough, bureaucratic procedures and practices make the filing of tax returns and payment of taxes unpleasant activities.

This annual ritual is akin to paying your dentist a visit to undergo a root canal, or going to the school principal’s office to discuss your child’s misbehavior in class. You don’t look forward to them.

The unease starts with the preparation of the applicable tax return depending on the source of income: Form No. 1700 for purely compensation income and Form No. 1701 for self-employed and professional individuals.

The logical source of these forms, other than a BIR office, is its official website. But when you go to its website, Form 1700 is not in the list of downloadable forms, and the Form 1701 available on line is circa July 1999.

That form has long been replaced by a June 2013 version. If you want to download the latter you have to “google” it or go to the website of accounting firms that make it available to the public.

For a government office that is reputed to have the most sophisticated computer system in the bureaucracy, these omissions are difficult to explain.

Complicated

Until some BIR tax form designers felt there was no beauty in simplicity, individual income tax returns in the past consisted only of two or three pages, depending on the nature of the income to be reported.

Today, Form 1700 has four pages. Since the data requested are in the supporting documents prepared by the taxpayer’s employer, filling it up is a breeze with basic arithmetic skills.

Not so with Form 1701 which consists of 12 pages and over 200 line items that, where applicable, have to be filled up by the taxpayer concerned.

The first four pages alone of this form have 163 line items and the rest of the pages have an average of 10 line items each to answer.

Although its size can be reduced to a regular bond paper, the limited space would make it difficult for the taxpayer to fill in the blanks by hand, unless he has the hands of a 10-year-old child.

The alternative is to complete the form digitally, or by using the form made available through the computer. Too bad if the taxpayer is not computer savvy.

That’s the easy part. The real challenge is figuring out exactly what numbers are asked in the line items and how they relate to each other in the computation of the tax liability, if any.

With some line items making cross references elsewhere in other pages of the form, the taxpayer would find himself in a maze with the requested figures.

To make sure the tax return is properly done, the conscientious [or to use the words of the BIR, patriotic] taxpayer would have to consult or engage the services of an accountant to help fill out Form 1701.

If the objective of Form 1701 is to give accountants a living during the tax filing period or confuse the taxpayer into committing mistakes to justify the imposition of fines and penalties, it has accomplished it.

The BIR’s campaign to make taxpayers pay the correct taxes would be more effective if it made the process user friendly or easier to comply with.

For comments, please send your email to “rpalabrica@inquirer.com.ph.”

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DA adopting measures to keep record palay output

The Department of Agriculture has launched a program that promotes the propagation of high-yield rice varieties amid efforts to maintain the yearly growth of domestic output.

The DA expects that, through the High Yielding Technology Adoption (HYTA) program, the country may inch closer to the goal of self sufficiency in rice production.

Promoted under the HYTA program is the use among farmers of hybrid rice, certified inbred seeds, and the so-called Green Super Rice (GSR).

According to the International Rice Research Institute, the GSR is a mix of more than 250 different potential rice varieties and hybrids variously that are adapted to difficult growing conditions such as drought and low inputs, including no pesticide, less fertilizer and less herbicides.

Agriculture Undersecretary Antonio Fleta, who heads the DA’s national rice program, said the HYTA program expects high yielding seeds to be planted in more than 560,000 hectares of rice fields all over the country.

“The HYTA program will help the country attain the 622,000-metric-ton palay production target for 2015, and more than 1 million MT palay for 2016,” Fleta said in a statement.

He said the program will be implemented in areas with good irrigation and where farmers’ organizations are ready to adopt “high yield rice technology like hybrid and certified seeds,” he added.

Fleta added that while the average growth rate in palay production from 2011 to 2013 was 3.2 yearly, target for 2015 is 5.35 percent and for 2016 2.1 percent.

Earlier this month, the DA signed a memorandum of agreement with the German Federal Enterprise for International Cooperation (GIZ) on a three-year project to improve education support for rice farmers, dubbed Better Rice Initiative Asia-Fostering Agriculture and Rice Marketing by Improved Education and Rural Advisory Services (Bria-Farmers).

Alcala explained that the P90-million Bria-Farmers is meant to help enhance food security through improved education and advisory services for some 8,000 farmers in the provinces of Aurora, Iloilo and Southern Leyte.

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DTI reviews imposition of tariff on newsprint

The Department of Trade and Industry is evaluating the appeals made by stakeholders who may be affected by the imposition of a safeguard duty on newsprint before it issues a final order.

Trade Secretary Gregory L. Domingo said several groups had asked the department to reconsider the slapping of an additional duty of P2,470 per metric ton (MT) on imported newsprint over the next three years, prompting it to set up a team to look into the matter.

“We’re now evaluating these appeals. A team has been talking to stakeholders. We will soon come up with the final order. We are rushing this and I am just waiting for the results of the study being made by our team. They’re still evaluating the situation,” Domingo said in an interview.

The Tariff Commission issued on Feb. 23 a report recommending the imposition of a definitive safeguard measure on imported newsprint. This was after the Commission found that the “domestic newsprint industry suffered serious injury from 2012 to September 2014” given the “abrupt and notably sharp increase in the volume of newsprint imported into the Philippines particularly in 2012.”

Tariff Commission chair Edgardo B. Abon earlier said the agency’s recommendation could no longer be overturned by the DTI, which was mandated by law to issue an order imposing a definitive safeguard duty on imported newsprint.

The only leeway that the DTI has, Abon said, was to change the amount of safeguard duty that will be imposed.

Abon said the respondents to the petition or those that were opposing the recommendation of the commission had the option to elevate their appeal to higher courts.

Last week, the United Print Media Group Inc. (UPMG) warned that the imposition of a safeguard duty on imported newsprint would not only seriously injure the print media industry, but would also jack up prices of textbooks, notebooks, and other educational materials.

The UPMG further warned that the additional safeguard duty would result in a 5-8 percent increase in the operational costs of newspaper and magazine publications. It will also jack up the prices of notebooks, textbooks, and other educational materials that use newsprint.

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