Tax court denies PLDT appeal on jurisdiction grounds

THE COURT of Tax Appeals (CTA) has rejected a petition by Philippine Long Distance Telephone Co., Inc. (PLDT), ruling that a Makati court has no jurisdiction over the company’s dispute with Tuguegarao City over P2.455 million in unpaid franchise taxes.

In a 15-page decision promulgated June 17, the CTA, sitting en banc, voted 5-3 to deny PLDT’s petition against the CTA Second Division, which originally declared improper jurisdiction on the part of Makati Regional Trial Court Branch 132.

The CTA cited a similar case in Bataan which declared the proper venue to hear a dispute within the province to be the Balanga City RTC.

It added that though PLDT headquarters is in Makati, the Makati RTC cannot “order respondents to cease and desist from assessing and collecting... business tax in addition to the franchise tax based on the same gross receipts.”

The CTA cited Section 21 of Batasang Pambansa (BP) 129 which states that “injunctive writs issued by an RTC are enforceable only within the judicial region where such court belongs,” emphasizing that the correct lower court to handle the case is the RTC of Tuguegarao.

The ruling was written by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Associate Justices Juanito C. Castañeda, Jr., Erlinda P. Uy, Cielito N. Mindaro-Grulla and Caesar A. Casanova.

Dissenting were Associate Justices Lovell R. Bautista, Ma. Belen M. Ringpis-Liban and Presiding Justice Roman G. del Rosario.

In 2006, the company was compelled to pay franchise tax in Cebu City as ordered by the Supreme Court amounting to P432,468.75 after it failed to make payments from 1999-2003.

PLDT challenged Cebu City in 2004 on the imposition of franchise tax, claiming it is exempt.

Hastings Holdings, Inc. -- a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. -- has a stake in BusinessWorld through the Philippine Star Group, which it controls.

source:  Businessworld

Duterte inks first PPP deal of Davao

By Alberto C. Agra / Special to the BusinessMirror

Davao City—Before he steps down as city mayor, incoming President Rodrigo R. Duterte signed a landmark contract with the private sector on Tuesday worth about P39 billion.

On the sidelines of the end of the two-day business summit in Davao, the President-elect signed a public-private partnership (PPP) contract with a proponent on port development. This is one of his last acts as mayor of Davao City.

As local chief executive, Duterte—joined by representatives of the City Council and the members of the Davao City PPP Board (DCPPPB)—signed a 50-year joint-venture agreement (JVA) with Mega Harbour Port And Development Inc. This is the first PPP contract entered into by the Davao City under its 2015 amended PPP ordinance.

The Davao Coastline and Port Development Project aims to spur the economic growth of the city. Davao envisions to be the premier socioeconomic and tourism center in Mindanao, as well as in the East Asia-Pacific region. The project will support the city’s plan of becoming the gateway of commerce and trade in the Davao Gulf area, even for the whole of Mindanao region.

The project, which will be situated on a 214.61-hectare land to be reclaimed by Davao City as project owner and the proponent as project developer, shall accommodate a modern and state-of-the-art commercial port for containerized and noncontainerized shipments, with cargo-handling equipment and information-technology infrastructure. An industrial park, a commercial complex, and residential lots and houses will also be constructed thereon.

According to the project study submitted by the proponent, the unprecedented demand due to increased economic activity in the region requires better infrastructure and logistics support for its industries and services sectors, which the region’s main public seaport and secondary seaports cannot fully accommodate, especially bigger cargo-movement requirements.

Under the JVA, the reclamation and vertical development will be undertaken by the proponent at no cost to the city. The proponent shall also provide the relocation site for the affected residents at the commencement of the project. The informal settlers shall be tapped as source of skilled and unskilled laborers during the construction phase of the project.

The project, to be jointly undertaken by the city and the private sector, shall contribute to the government’s efforts to reduce the high underemployment rate by helping attract multinational business-process outsourcing companies and call-center operators to set up shop in Davao City through the provision of an industrial park.

Aside from these benefits, the city government is expected to increase its income, in anticipation of the new establishments and business enterprises to be catered in the industrial park and commercial areas. The city’s increased income will consequently translate into increased tax revenues for the city government. With more revenues, the city will be less dependent on the internal revenue allotment from national government and will have more funds for basic and social services.

This first PPP of the city truly advances the true north of PPPs —to promote the general welfare and provide for better quality of life of the people. The City Council and the multisectoral DCPPPB, in approving the terms of the JVA and recommending approval to the mayor, respectively, made sure this mandate and the pro-people and pro-change stance of the city will be respected and advanced.

After the signing of the JVA, the city government will forward the documents to the Philippine Reclamation Authority for its study and recommendation to the board of the National Economic and Development Authority for its approval.

Davao City joins 70 other local governments in pursuing PPPs using their own PPP ordinances. The provinces of Bataan and Nueva Ecija, and Calamba entered into JVs for their government center and capitol redevelopment, the province of Quezon on bulk water, hydropower and wind power, and the cities of Pasay, Parañaque and Manila, and Cordova Municipality on reclamation. Manila and Valenzuela cities entered into JVs for their markets, Iloilo City and Batangas City on terminals, and Cebu City and Cordova Municipality together for the third bridge in Cebu.

The message of the incoming President is clear. He believes in the importance and criticality of PPPs to plug infrastructure deficits. Dramatic change can be brought about through PPPs. He has demonstrated that local governments can be trusted and that they possess the competencies to pursue iconic and high-impact PPP projects. By signing the JVA, where the proponent was chosen through the unsolicited proposal route, he subscribes to this alternative route of selecting the proponent.

The future of PPPs in the country is bright. The nation is hopeful that under the Duterte administration, Filipinos will see a new international airport, waste-to-energy projects, more expressways, more water-related projects, monorail and subway systems, more socialized housing units, health-care facilities, more land development, more economic zones and more renewable-energy arrangements.

The signing of this JVA could not have come at a more auspicious time. It signals the “warm-up” to the realization of the 10-point socioeconomic agenda, the fourth agenda being to “accelerate annual infrastructure spending to account for 5 percent of GDP, with PPP playing a key role.” This showcases “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran.” This is definitely a good first step not just for Davao, but also for the whole country.

LGUs granted extension to meet BuB requirements

THE BUDGET department has extended the period for local government units (LGUs) to comply with requirements set in order to tap funds allocated under the government’s bottom-up budgeting (BuB) program.

The agency through Joint Memorandum Circular No. 6-A allows the provisional release of BuB funds to towns and cities, provided that they meet the standards required of them by end-September this year. The original deadline was set on March 2015.

The circular was jointly signed by the heads of the Department of Budget and Management (DBM), the Department of Social Welfare and Development, the Department of the Interior and Local Government, and the National Anti-Poverty Commission, which covers fund allocations under the 2015 national budget.

LGUs must secure good governance conditions as certified by the national government before they can access additional funding through the BuB scheme, where local governments, civil society and community organizations identify and propose poverty reduction programs that may be funded by the national government.

LGUs can tap as much as P20 million for a poverty reduction project within their locale each year since it was launched in 2013 by outgoing Budget Secretary Florencio B. Abad.

However, incoming Budget chief Benjamin E. Diokno said in a television interview that the BuB was merely used as a “political tool” under the Aquino administration.

Should an LGU fail to achieve the requirements outlined under the BuB program by the end of the third quarter, the funds for the local projects will be released either to the provincial government where the area is located, or to a concerned participating agency for implementation, the circular read.

However, the province that will receive the funds must also meet the Good Financial Housekeeping standard required of any LGU, as well as a letter expressing their “willingness” to carry out the project for the concerned city or municipality.

The Budget department allocated P24.7 billion for BuB projects under the P3.002-trillion national budget this year, with plans to raise the allocation to P35 billion in 2017. -- M.L.T. Lopez

source:  Businessworld

PNoy men face raps for misused P800B

Outgoing officials of the Aquino administration may be charged with technical malversation over unreleased Internal Revenue Allotment (IRA) amounting to P800 billion for Local Government Units (LGUs), Batangas Gov. Hermilando “Dodo” Mandanas said.

Named as respondents in the case submitted for resolution were Budget Secretary Florencio Abad, Finance Secretary Cesar Purisima, Executive Secretary Paquito Ochoa Jr., the National Treasurer and chiefs of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC). According to Mandanas, they were involved in approving the release of the IRA but allegedly withheld and misused part of it for national government programs, instead of automatically releasing the entire amount to the LGUs in accordance with the law.

“But all of them will say they’re just following orders, just like [in the case of] the DAP [Disbursement Acceleration Program]. The Executive Secretary [Ochoa] is included in the case because you cannot sue the President [Benigno Aquino 3rd]. He [Ochoa] has agreed with me that it has to be paid. He knew it because he was a former city administrator of Quezon City [Metro Manila],” Mandanas told The Manila Times after he spoke with town mayors during the League of Municipalities of the Philippines’ (LMP) executive committee meeting on Friday night at the New World Hotel in Makati City (also in Metro Manila).

“The money really belongs to the local government units and knowingly the national government used the money for their own projects, so using somebody else’s money is technical malversation. It’s really in bad faith,” the Batangas governor explained.

Mandanas, however, said the late Interior Secretary Jesse Robredo could not be held liable for diverting the IRA because the former Cabinet official had agreed that the funds should be given to the LGUs.

Before he was appointed as head of the Department of Interior and Local Government, Robredo had served as long-time mayor of Naga City, Camarines Sur.
He was the husband of Vice President-elect Leni Robredo.

“I did not include him [Robredo] in the case because this guy had good faith. He referred this to the DBM [Department of Budget and Management],” Mandanas said.

The governor filed a case with the Supreme Court on January 10, 2012 while the funds were still at P500 billion.

He said the case has already been submitted for resolution.

The High Court, meanwhile, ordered the automatic release of IRA as sought by Mandanas and former senator Aquilino “Nene” Pimentel Jr. in 2003 wherein a total of P60 billion in allotment backpay had been received by the LGUs.

Mandanas, former chairman of the House ways and means committee, said the Aquino administration should recognize in 2016 an increase of approximately P800 billion in IRA for local government units as IRA backpay from 2010 to 2016.

“That amount now which is unreleased in the portion of the just share, right now is already P800 billion, that much. If we want to translate it to what we are supposed to be getting, the national government has been withholding approximately 25 percent of the IRA that should go to us every year,” he told the town mayors.

Mandanas noted that the Internal Revenue Allotment should be released automatically and unconditionally as stated in the 1987 Philippine Constitution.

“As we all know, this is the lifeblood of the local government units. This is the one that really gives life. Without this, we do not have the local autonomy,’ he said.

“The share of the local government units should be 40 percent, according to the Local Government Code,” the Batangas governor added.

When he discovered that there is some P400 billion in unreleased IRA in 2010, Mandanas said he immediately presented this to the House committee and then he was referred by Robredo to Abad where the Budget secretary also agreed but he told him that they will use it instead because the Liberal Party was in power, and this was normally done by past administrations.

“I said to him [Abad] we’re from daang matuwid, we have to give this to the local government units because growth has to be inclusive which means that this has to reach the barangay [villages],” Mandanas said.

Daang matuwid or straight path is the good-governance mantra of the Aquino administration.

Mandanas, also a former member of the ruling Liberal Party, said he was ousted as chairman of the House ways and means committee because he was advocating the automatic release of the IRA and he did not also sign an impeachment complaint against then-Chief Justice Renato Corona.

He said he wants to save the Aquino administration from legal trouble.
If the outgoing President recognizes the law, Mandanas added, he should order the automatic release of the IRA.

“If he [Aquino] recognizes I, then there is good faith, and once there is good faith, then there is no malice. If there is no malice, there is no cause for action,” he said.

Mandanas pressed the Supreme Court to immediately release its decision compelling the outgoing administration to distribute the funding to the local government units before the term of President Aquino expires on June 30.

“We will encourage the SC to release its decision on this, do not be afraid,” he said.
LMP president Leonardo Javier expressed support for Mandanas in his fight to recover the money taken by the national government from the local government units.

“We’re all behind him [Mandanas] now that we realized how important this is for our all-inclusive growth,” Javier, Mayor of Javier town in Leyte province, said in an interview.

He will also encourage other mayors to support this advocacy, he said

“We are going to inform them and will let them join our crusade,” Javier said.

He noted that having a just share of the IRA for the local government units would not only boost autonomy but also inclusive growth in rural areas, especially the poor sectors of the country.

“We will push for this kind of fund because this will not only provide livelihood in the rural areas, it will also help decongest Metro Manila,” he said.

source:  Manila Times