TERM OF THE DAY job and its relationships to other jobs.


Source: Bureau of Micro, Small and Medium Enterprise Development- Department of Trade and Industry


Job description A document that describes the tasks and responsibilities of a


business The Manila Times


business@manilatimes.net FRIDAY


SEEK COURT INTERVENTION, ADVISES SENATO R


Motorists told to brace for increase in toll T


BY DARWIN G. AMOJELAR AND EFREN L. DANAO SENIOR REPORTERS AND KATRINA MENNEN A. VALDEZ REPORTER


OLLWAY operators on Thursday


warned that the price of entry to the country’s major expressways


would rise once the value-added tax (VAT) is imposed starting next month. The operators of North Luzon Ex-


Slight reduction


pressway (NLEX) and South Luzon Expressway (SLEX) said they will pass on the 12-percent VAT to motorists. “Rates will be grossed up for VAT,”


Rodrigo Franco, Manila North Tollway Corp. (MNTC) said in a text message. MNTC operates the NLEX. At present, MNTC charges P174 for Class 1 vehicles such as cars; P435 for Class 2 vehicles such as buses; and P522 for Class 3 vehicles such as trucks. Franco said VAT will have a slight impact on vehicle traffic since the tax will make tolls more expensive. MNTC’s average traffic volume as measured by vehicle entries rose 6 percent to 154,395 in 2009 from 151,846 the year before.


in traffic volume In a separate text message, Isaac David, president of South Luzon Tollway Corp. (SLTC) agreed that the VAT on tolls would result in a slight reduction in the volume of traffic. “It will be temporary though,”


David said, adding that the VAT to be collected from the motorists will be remitted to the government. “We are only collecting for the


government,” he said. SLTC maintains the SLEX, which is the main artery that connects the export processing zones in Southern Luzon to Metro Manila. Exports comprise about 30 per- cent of the Philippine economy, with their decline last year respon-


sible for the country’s near fall into a recession.


The increase brought about by the


VAT would be on top of a looming hike in the SLEX tolls. SLTC is set to raise the tolls at SLEX


by as much as 250 percent on August 16. The toll hike had been scheduled for July 7, but the Toll Regulatory Board (TRB) decided to defer its im- plementation by a month. The new tolls are P77 for Class 1, P155 for Class 2 and P232 for Class 3 vehicles. The existing rates are P22, P43 and P65 for Class 1, 2 and 3 vehicles, respectively.


On a per kilometer basis, the fol-


lowing are the new rates: P2.73 for Class 1, P5.46 for Class 2 and P8.19 for Class 3.


The old rates are as follows: P0.75 per kilometer for Class 1, P1.51 for Class 2 and P2.27 for Class 3 vehicles.


Inflation impact localized Despite the higher tolls, the Na-


tional Economic and Development Authority (NEDA) said the 12-per- cent VAT would have no impact on overall inflation. “The impact is lo-


➤Brace B2


■ A section of the South Luzon Expressway, toll for which would rise by 12 percent as the operator warned it would pass on the value-added tax to motorists. PHOTO BY JESSIE LAURETA


DTI to rethink export promo activities


BY BEN ARNOLD O. DE VERA REPORTER


THE Department if Trade and In- dustry (DTI) said it will rethink its export promotion activities in light of the agency’s bid to stream- line its operations. DTI Secretary Gregory Domingo


■ Federal Reserve Chairman Ben Bernanke listens during a hearing of the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill Wednesday (Thursday in Manila) in Washington, D.C. Federal Reserve Chairman Ben Bernanke appeared before the committee to speak about the Semiannual Monetary Policy Report. AFP PHOTO


Stocks, peso falter on Fed concern over US recovery


BY KRISTA ANGELA M. MONTEALEGRE REPORTER


LOCAL stocks and the peso faltered on Thursday following the US Fed- eral Reserve’s less optimistic eco- nomic outlook and news of the Phil- ippines’ wider budget deficit. At the Philippine Stock Exchange, the local composite index lost 3.81 points, or 0.11 percent to 3,414.90 while the broader all-shares index shed 3.53 points, or 0.17 percent to 2,169.21.


Losers beat gainers, 67 to 41, while 67 stocks were unchanged. A total of 1.37 billion stocks worth P3.07 billion changed hands. The bleak economic outlook of Fed chief Ben Bernanke on the US economy hit Wall Street, sending the Dow Jones industrial average to fall by 109.43 points, or 1.07 percent to 10,120.53. Bernanke’s statement that the economic outlook was “unusually uncertain” confirmed investor wor- ries that the world’s largest economy has weakened. “It was partly because of the Dow Jones, but we also have to consider the fiscal deficit numbers,” said Jose Vistan of AB Capital. The Philippine government’s budget deficit widened to P196.7 billion in the first six months, or more than a third higher than the P145.2-billion ceiling set by the pre- vious administration.


Vistan said this would put some pressure on President Benigno Aquino 3rd to clarify in his first State of the Nation Address how the gov- ernment would address the coun- try’s ballooning budget deficit. “He needs to discuss how he will


Govt survey shows call center workers’ compensation nearly doubled in 2 years


sustain for six years the high confi- dence on him and the Philippine economy,” Vistan added.


Astro del Castillo of First Grade Holdings said Aquino’s economic team has already taken measures to curtail that problem with the impo- sition of the value-added tax on tollways across the country. Del Castillo said investor posi- tioning ahead of the announcement of corporate earnings could some- how offset the concern arising from foreign markets. “We may see some investors po- sitioning ahead of the announce- ment of corporate earnings. There might be another tug-of-war be- tween bargain hunters and investors who were somehow affected on what’s happening overseas,” he said. At the Philippine Dealing System, the peso shed 2 centavos against the dollar to finish at 46.495 from 46.47 the previous day.


The exchange rate opened at 46.60 and moved to a high of 46.65 and a low of 46.48, with total trad- ing volume reaching $998.8 million from $794.74 the previous day. Traders, however, said the market will likely move next week as they await the results of the stress test in the eurozone that will come out on July 23. Trading range stays at 46.75 to 46. WITH REPORT FROM LAILANY P. GOMEZ


THE business process outsourcing (BPO) industry received billions of pesos in financial support from the government in 2008, according to official statistics. Data released by the Na- tional Statistics Office (NSO) showed that total subsidies granted to BPO firms amounted to P1.014 billion. The NSO said subsidies are special grants in the form of financial assistance and tax exemption or tax privilege meant to develop an industry and to protec t it from competition. The BPO industry includes


call centers, human resources, accounting and payroll outsourcing. The major compo- nents of the industry are contact/call centers, software development, animation/ creative service, data transcrip- tion, back office processing and engineering design. The NSO said the industry


employed 187,000 workers in 2008, higher than the 141,630 workers in 2006.


The bulk of the jobs were


»TOTAL COMPENSATION 62.4


(in billion pesos) 65


38.6


35 0


2006 2008


P47 billion, thus accounting for 75.3 percent of the total paid by the industry. Other software and consul-


in call center activities, which employed about 150,000 workers. This was followed by estab- lishments engaged in other software and consultancy with about 17,000 workers; data processing activities, 13,000; and database activities and online distribution of electronic content, 410. In 2008, the total compensa- tion paid by BPO firms to their workers hit P62.4 billion, nearly double the P38.6 billion in 2006. This is equivalent to an average monthly compensation of P27,808 per employee. Call centers paid the highest total compensation of about


Improving RP public finances T


HE European sovereign debt problems may loom as a fresh threat to the global economic recovery, but improving the Philippines’ public finances will strengthen the country’s eco- nomic defenses against its potential impact, as well as improve government spending for pro-poor programs.


This is one of the main mes- sages of the Philippines Quarterly Update (PQU) released by the World Bank. Produced by the


RENE MARTEL


economics team of the World Bank in Manila, the PQU provides quarterly updates on key eco- nomic developments and policies


in the Philippines. Early this year, concerns about rising indebtedness in European countries—including Greece, Spain and Portugal—has gener- ated fears that the global economy might slide back to recession and cause further difficulties in developing coun- tries like the Philippines. “A credible plan towards fiscal consolidation over the medium- term—along with measures to manage fiscal risks—would


significantly reduce the Philippines’ exposure to the worsening Euro- pean debt problems,” says the PQU. “Such credibility could be


achieved, for example, by design- ing a comprehensive and multi- year reform package.” The report says stronger public finances inspires confidence of the financial markets, creates policy flexibility to tackle global downside risks, and boosts economic growth. “The Aquino Administration’s


focus on increasing the efficiency of revenue collection and expendi- tures is welcome in that regard and is expected to generate important fiscal space,” says World Bank Senior Economist Eric Le Borgne. “The government would need more funds for education, health, and other social programs so that marginalized sectors could equitably share in the benefits of growth in a sustainable way.” The PQU forecasts the Philippine economy to grow by 4.4 percent in


2010 and 4.0 percent in 2011 on the back of a global recovery in trade. The Report says that the country’s growth potential could be much higher given the new administra- tion’s strong reform and anti- corruption agenda that could shore up business confidence.


“While large fiscal risks in some European countries have damp- ened growth prospects in that region, the global growth outlook remains favorable especially for


➤FinancesB2


tancy placed a far second with P8.9 billion, while data process- ing gave out P3.5 billion in compensation. The database activities and on-line distribution of electronic content paid the lowest salaries amounting to P128.6 million. The BPO industry’s gross


revenue amounted to P127.2 billion in 2008, higher than the P81.8 billion in 2006. The call centers contributed the biggest at P89.5 billion, followed by other software and consultancy, P21 billion; supply and data processing, P8.4 billion; and software publishing, P5.3 billion. Database activities and online distribution of electronic content earned the least revenues at P453 million. The industry’s gross addition


to fixed assets (capital expendi- tures less sale of fixed assets) totaled P10.8 billion in 2008. DARWIN G. AMOJELAR


on Wednesday night told members of the Philippine Chamber of Com- merce and Industry that the agency will assess if its existing export pro- motion efforts are effective. “I’m not sure if interventions [such as trade fairs, business match- ing, product design and develop- ment assistance, etc.] are worth- while,” Domingo said. “We’re now gathering inputs from exporters [to determine] effective ways to support them,” he said. The DTI chief said that he is “more against than for” the Bangko


Sentral ng Pilipinas’ intervention of foreign exchange—something that exporters had been asking for. “I understand the central bank’s position on it. They try to control the volatility of the exchange rate, not the direction where it goes,” he said. Besides an assessment of the


country’s export promotion activi- ties, the DTI will also be “selective” in its investment generation efforts as it would focus more on industries that would create jobs and ensure domestic food sufficiency. Domingo said that the sectors


that have the “best potentials” in the next six years are tourism, informa- tion technology-business process outsourcing (IT-BPO), electronics, mining and housing.


These will be the industries that


the DTI’s investment promotion agencies would prioritize, he said. The trade chief said the agricul-


ture sector would also be given pref- erence to achieve food security. “[There are] industries that can compete and grow; these industries, we will support,” Domingo said. He said the tourism industry of- fers “great promise”, as it can gen- erate millions of jobs—ranging from unskilled to management- level positions. “We will be supporting tourism


investments by granting incentives and including them in the IPP [In- vestment Priorities Plan],” he said. The annual IPP identifies busi- ness activities that qualify for tax incentives and other perks from the government. To come up with the IPP, the Board of Investments—an invest- ment promotion and incentives-giv- ing agency under DTI—will gather the plans and assessments of do- mestic industries, Domingo said.


Case filed against ‘poor’ smugglers


THE government on Thursday seized goods imported by two pro- prietors who share a shanty for their business address. In a press conference, Bureau of Customs (BOC) Commissioner Angelito Alvarez said it was “ex- tremely” suspicious that two separate companies that share a common busi- ness address located in a poor man’s residential area could afford to import goods valued at least P300 million during the last six months.


The items seized comprised appli-


ances, agricultural equipment and gen- eral merchandise. “We have yet to confirm whether these goods are really understated, but these importations may even run to billions of pesos but we just re- lied on what was declared in the en- tries,” Alvarez said.


The BOC recommended multiple counts of smuggling against Eduardo Ignacio Saguid, proprietor of Gold Mind Trading and Nestor Mendoza Ignacio, proprietor of Quick Flo Trading. Records show that the two compa-


nies, which began operating in 2008, share a common address on Road 4, NDC Compound, Santa Mesa, Manila. Gregorio Chavez, BOC deputy com- missioner and executive director of the Run After the Smugglers Program said eight accredited customs brokers were included in the complaint. “Thus, the BOC suspects that the ac- cused have been bringing in goods in[to] the country to service for a much bigger smuggling syndicate,” Chavez said. “It is most likely that their unpaid taxes


have reached billions already,” he said. The official said the duties and taxes paid were short by P17 million. Alvarez said the BOC Intelligence


and Investigation Service and the X-ray Group would be subjected to a meticu- lous probation, as the goods, which came from China, should have been screened using the “red lane.” “These goods passed the green lane instead. Green lane is only supposed to allow goods being imported by locators of the Philippine Economic Zone Authority,” the BOC chief said. The Department of Finance an- nounced that it would alternately file tax evasion cases through the BIR and BOC under the Run After Tax Evaders and RATS programs, respectively. KATRINA MENNEN A. VALDEZ


July 23, 2010


B 1


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BIZZ FIZZ


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