PPA told: Share largesse with LGUs

The chairman of the House Committee on Higher and Technical Education on Sunday said the state-run Philippine Ports Authority (PPA) should share with provinces, cities and municipalities the income the PPA generates from local shipping port operations.

Rep. Roman Romulo of Pasig City, in a news statement released over the weekend, said local government units (LGUs) could get their slice from the 50-percent portion of the PPA’s annual net income remitted to the National Treasury as cash dividends.

The PPA is one of several state-controlled corporations required by law to declare as dividends and transfer at least 50 percent of its yearly net profits to the National Treasury.

“Thus, the PPA will still get to keep at least 50 percent of its annual net profit for reinvestment in port improvement and expansion,” Romulo said.

“Local governments are entitled to their fair share of the earnings from commercial seaports in their areas,” he said. “Our proposal will not diminish in any way the PPA’s mandate and financial capability to continuously modernize and upgrade public port operations countrywide.”

Romulo added that due to a rapidly growing economy and increased shipping traffic, the PPA has been raking in bigger profits every year. “The PPA posted a net income of P4.26 billion on gross revenue of P12.57 billion in 2014,” he said.

He added that net income was up 15.1 percent, from P3.7 billion in 2013, while gross revenue was up 13.5 percent from P11.07 billion.

“The PPA has yet to report its 2015 figures. However, the agency previously reported a net income of P2.54 billion on gross revenue of P4.45 billion from January to April 2015 alone,” he said.

“Net income was up 22.1 percent, from P2.08 billion in the same four-month period in 2014, while gross revenue was up 20.2 percent, from P3.7 billion,” the lawmaker added.

Attached to the Department of Transportation and Communications, the PPA is especially charged with financing, managing and running public ports.

As such, the agency also collects all the revenue from port activities and services, including those from passenger terminals.

source:  Business Mirror

Local gov’ts struggle to collect share of oil, gas, mining taxes

LOCAL GOVERNMENT units (LGUs) have raised concerns over the delayed release of their share in state revenue from mining, oil and gas companies.

In an e-mailed statement dated March 1, Union of Local Authorities of the Philippines, Inc. (ULAP) Executive Director Czarina Medina-Guce said “there are accounts that... LGUs [are experiencing] delays in the receipt of their shares and, in some cases, LGUs do not receive any share at all.”

ULAP has recorded cases of delayed remittance during a road show conducted for the Philippine Extractive Industries Transparency Initiative (PH-EITI) in the Caraga Region, Palawan, Cebu, Davao and National Capital Region from July 15 to Aug. 20 last year.

“In the documentation report made by ULAP, participants from all the areas covered by the road show raised the said issue on the delay in the release of LGU shares,” Ms. Medina-Guce said.

“Furthermore, the road show also identified the following LGUs which have large-scale mining sites which still have not received their LGU shares, but this list is definitely not encompassing of all LGUs experiencing this difficulty.”

The province of Siquijor, for one, has received no share from the national government’s mining revenues for the last 20 years while MacArthur, Leyte has waited for such funds since 2012, Ms. Medina-Guce said.

Ms. Medina-Guce also cited Cantilan, Surigao del Sur, the province of Palawan, Guian, Samar and all municipalities of Dinagat Islands as experiencing delays in the receipt of their share from the national government.

Sec. 290 of Republic Act (RA) No. 7160 or An Act Providing for a Local Government Code of 1991 states that LGUs should receive a 40% share in mining taxes, royalties, forestry and fishery charges, and other similar fees collected in the preceding year.

The law further provides for the automatic release of such funds “without need of any further action... on a quarterly basis within five days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose.”

“The DBM (Department of Budget and Management) has already [started] implementing this year an easier way to download the shares of LGUs,” Finance Assistant Secretary and PH-EITI Focal Person Ma. Teresa S. Habitan earlier said on the sidelines of the launch of the 2nd PH-EITI Country Report on Feb. 16.

“But we also need to do work on the LGUs concerned so that they will also be able to reflect in their books how much exactly, as a share of revenue, are they receiving as shares in national wealth,” Ms. Habitan added.

According to data collected by the multi-stakeholder initiative, the DBM booked a P684.4-million share for LGUs hosting extractive operations in 2013. The LGUs, however, reported having received P410.38 million only.

Ms. Habitan noted the PH-EITI was unable to reconcile the amounts reported by DBM and LGUs because both had no disaggregated data, which could show the specific source of the mining revenues, for instance.

“As far as the LGUs are concerned, a lot of technical capacity has to be introduced into the way that they are doing the reports and we are only starting to introduce that this year,” Ms. Habitan said.

Citing the PH-EITI report, Ms. Medina-Guce of ULAP also noted that LGUs are unable to determine the portion of their share in the national wealth attributed to mining, oil and gas operations.

“LGUs are not aware where the mining company pays taxes. Some mining companies pay directly to Large Taxpayers Assistance Division of the Bureau of Internal Revenue in Manila, so release of share is to the head offices,” Ms. Medina-Guce added.

To tackle delays in remitting the share of LGUs, Nickel Asia Corp. President and Chief Executive Officer Gerard H. Brimo said LGUs should receive payments directly from mining, oil and gas companies.

“Why should the local government unit wait for a year or two to get their share of the funds? That certainly should be a feature of the new mining tax regime,” Mr. Brimo, who represents the mining industry in the PH-EITI multi-stakeholder group, said during a press conference held for the 2nd PH-EITI Country Report’s launch.

Ms. Medina-Guce said the delayed release of the LGU share in the national government’s mining revenues could impact service delivery and pose social costs.

“The shares from extractive industries are important to LGUs given that these shares are utilized to finance their local development and livelihood projects for their constituents especially for those affected by extractive industries,” Ms. Medina-Guce said.

source:  Businessworld