Just days before he assumed the Presidency, Mayor Rodrigo Duterte unveiled a mammoth master plan for a P39-billion Davao Coastline and Port Development project.

A joint venture agreement was signed June 21 by the Davao City government and Mega Harbor Development Corporation. The project covers 200 hectares from the existing Sta. Ana Wharf to the Bucana area, where the Davao River flows out to the gulf.

Under the plan, Mega Harbor will begin with the reclamation of four islands. The first of the four islands will host a modern port with berthing length of 2.5 kilometers.

The second and third islands will be devoted to mixed-use components. The City of Davao will get about five hectares for its own use. The three islands will be linked to the mainland by a common access road.

The fourth island will feature a residential component, including a relocation site for the affected settlers. It will have its own access to the mainland.

As things happen in Davao City, this huge undertaking is expected to progress very quickly. Mega Harbor announced the company would be complying with the necessary permits within the year. The project development group, meanwhile, is now completing its assessment of the traffic, social and environmental impact of the project.

This large project was approved by the City Council last April 12, as undergoing a Swiss Challenge where possible contenders could offer lower bids for the original proponent to match. The entire package will be completed at no cost to the city.

Residents that might be affected by the project will be offered relocation to medium-rise building to be constructed within the project area. The whole project will be organized on the theme of “Green Urbanism” and promises to be a world-class city.

The most notable thing about this project is that it was unsolicited.

The proponents built a design and proposed it to the City Council on a joint venture arrangement. The City Council, for its part, examined the project, looked at its environmental impact and the social costs of relocating the settlers to be displaced. Then they approved it, as simple as that.

This departs quite sharply with the method and policies associated with public-private partnerships during the Noynoy Aquino administration.

To begin with, no unsolicited proposals were entertained. This foreclosed any bright ideas that might emanate from the private sector.

Then, the Noynoy administration looked at the front-end revenues to be made from a PPP project. This was an oppressive inclination. It forced private investors to cough up huge sums for government’s share of the program, in most cases undercutting viability of the project or forcing consumers to pay for the exorbitant front-end costs.

It will do well for the bureaucrats of the Aquino era to look at this project in Davao City.

No front-end fees were paid government, only a share of the land to be developed. No additional costs were imposed that would have undermined the viability of the project.

The Davao project, hopefully, serve as the model of how things could be done from hereon.

source:  Philippine Star Column of Alex Magno 

‘Less than 1 percent of LGUs ready for disasters’

LESS than one percent, or only 160 out of 1,700 local government units (LGUs), have existing action plans to deal with disasters, a fact that makes poor people more vulnerable to calamities, according to an official of the Climate Change Commission (CCC).

CCC Secretary Emmanuel de Guzman said the discovery compels them to require all the LGUs to formulate their respective local climate change action plans (LCCAPs) by the end of next year.

He noted that an action plan will enable the LGUs to increase the capacities of local communities to reduce disaster risk and adapt to climate change.

“Each LGU should have a local climate change action plan as mandated by the Climate Change Act of 2009. Thus far, out of 1,700 LGUs including provinces, only 160 would have a plan,” de Guzman, vice chairman of the CCC, said.

The official added that there is an urgent and compelling need to enhance the capacity of the LGUs to adapt to climate change and reduce their vulnerability to weather-related disasters in order to protect the nation’s poorest, who bear the brunt of climate change impacts.

“Based on our timeline, we should have 500 plans by the end of the year and all the LGUs, municipalities, cities and provinces, should have their own LCCAP by the end of next year,” he said.

The absence of such action plans, de Guzman pointed out, is a “social sin” because it is contrary to the interest of the most vulnerable sectors of society.

“Non-action on climate and disaster risks is a social sin and a form of injustice to the poor and the most vulnerable,” he said.

With the LCCAP, de Guzman further noted, the LGUs could have access to the P1-billion People’s Survival Fund (PSF) that will finance local adaptation initiatives.

The PSF may be used to finance adaptation activities such as water resources and land management; risk insurance for farmers, agricultural workers and other stakeholders; infrastructure development and protection of natural ecosystems; and monitoring of vector-borne diseases triggered by climate change.

De Guzman said sectors mired in poverty such as farmers, fisherfolk and informal settlers living in danger areas have a higher chance of suffering ill effects of climate change since they often live, farm or hold assets in areas more exposed to drought and floods, which put their homes, crops, livestock and even their own lives at greater risk.

These sectors, he added, also have limited safety nets or insurance mechanisms to help them cope with climate change-related shocks like failed harvests linked to changing weather patterns and loss or damage linked to weather extremes.

“An LCCAP could well define the strategies of a community for strengthening local risk governance, enhancing rural livelihood, ensuring ecosystems integrity and building cultural resilience. Implementing these strategies surely reduces disaster risk and builds the adaptive capacity and resilience of communities to climate change impacts,” de Guzman explained.

He said they plan to empower the LGUs against climate change by rolling out in the coming months a network of learning centers that will offer standardized training modules on adaptation and mitigation measures.

De Guzman cited Section 14 of the Climate Change Act of 2009 or Republic Act 9729 that mandates LGUs as frontline agencies in the formulation, planning and implementation of climate change action plans in their respective areas, consistent with the provisions of the Local Government Code, the National Framework Strategy on Climate Change and the National Climate Change Action Plan.

source:  Manila Times

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

Local government officers’ pay to rise amid increased BuB activity

THE BUDGET department will upgrade the salaries of some local government positions next year, part of an expansion of programs entailing the allocation of more national funds to local government units (LGUs).

In a statement issued yesterday, the Department of Budget and Management (DBM) announced the reclassification of some Local Government Operations Officer (LGOO) items under the Department of the Interior and Local Government (DILG).

“Essentially, this is part of the national government’s overall investment in strengthening LGUs,” Department of Budget and Management Secretary Florencio B. Abad said in the statement. 

“We are supporting the oversight agencies and personnel who will be working with LGUs for the almost P100-billion funds intended for performance-based, direct download programs.” 

The government will reclassify LGOO IV personnel, who function as cluster heads, to LGOO VII positions. The change involves a two-step bump in salary to grade 24.

A cluster head assists a provincial DILG office in operations management, planning and supervision of seven to 15 city or municipal LGOOs.

Meanwhile, LGOO V positions, posted to municipalities, will be reclassified to LGOO VI with a corresponding change in the salary grade to 22 from 20. 

Cluster heads will continue to receive representation and transportation allowances equivalent to what a division chief receives. LGOO VI assigned to municipalities can receive the same allowance given to those in independent and component cities. 

Mr. Abad noted the implementation and eventual expansion of the Bottom-up Budgeting (BuB) and other performance-based programs for LGUs present an additional workload for LGOOs. 

The BuB initiative, first implemented in 2013, provides for a participatory budgetary process by allowing local stakeholders to select priority poverty reduction programs the national government will fund.

The DBM is setting aside P35 billion of next year’s P3.35-trillion national budget for BuB projects. This marks a 42% increase from the P24.7 billion programmed this year, as the government expands the program to cover 12,000 barangays initially.

LGOOs are expected to generate baseline conditions in the first-wave barangays, assist in project development, initiate monitoring and risk management, and complete four visits per project for no less than 30% of barangays per municipality.

In 2012, LGOOs provided technical assistance on project development and monitoring to 573 projects. In 2015, the number ballooned to 17,623 projects under the DILG and other national government agencies. 

“The performance management part of their job has become more complex,” Mr. Abad noted. 

“They now have to manage executive-legislative collaboration, and their monitoring and reporting requirements have multiplied, such as inter-agency requirements, program performance, and risk management. In addition, they now also ensure that CSO (civil society organization) assemblies and forums for BuB are convened.” -- Keith Richard D. Mariano

source:  Businessworld