Yield inches up on 10-year bonds

BY DENNIS GADIL

The Bureau of Treasury yesterday decided to sell only P6.530 billion of 10-year bonds, from a planned P8.5 billion float, because buyers were asking yields much higher than the coupon rate of 7.875 percent. (more)

Fitch Ratings sees deficit reaching P232B with privatization delay

BY DENNIS GADIL

London-based Fitch Ratings said government’s budget deficit could balloon to P232 billion from the rating agency’s P222 billion estimate if expected proceeds from its privatization binge are not realized. (more)

Philamlife posts P3.3B net profit

Local unit of troubled AIG helps save company from bankruptcy

BY DENNIS GADIL

Philippine American Life and General Insurance Co. (Philamlife), the local unit of troubled US-based American International Group (AIG), yesterday reported a net profit of P3.3 billion for 2008, an increase of 186.6 percent from the 2007 level. (more)

First quarter deficit exceeds target

By DENNIS GADIL

The government incurred a budget shortfall of P119.7 billion during the first quarter, spending about P355 billion while collecting revenues of P235.4 billion. (more)

Gov’t pushes back privatization plans

The government has pushed back to the second semester its privatization target for Food Terminals Inc. (FTI) and PNOC-Exploration Corp. (PNOC-EC) due to bad market conditions.-Dennis Gadil (more)

Customs collection short of P5.2B in 1Q

By DENNIS GADIL

Collections by the Bureau of Customs (BOC) during the first quarter were short by P5.2 billion of its target at P45.8 billion.(more)

Yields fall as more rate cuts loom

BY DENNIS GADIL

Interest rates for government short-term debt notes declined across-the-board for the second time this month as investors expect moderating inflation will give the Bangko Sentral ng Pilipinas further room to cut interest rates to stimulate economic growth. (more)

UBS says new deficit target still ‘low’

BY DENNIS GADIL

After prodding government to adopt a higher budget deficit target, Union Bank of Switzerland (UBS) said the new deficit target of P199.2 billion, equivalent to 2.5 percent of gross domestic product (GDP), is still "a little low." (more)

Citigroup forecasts higher deficit at 3% of GDP

BY DENNIS GADIL

Citigroup expects a much bigger government budget deficit for this year, which it estimated at P229 billion to P238 billion, higher than its earlier projection of P197 billion... (more)

HK firm makes grim forecast in election year

Hong Kong-based CLSA does not see a major economic turnaround for the Philippines in 2010 despite being an election year, forecasting a gross domestic product (GDP) growth of 0.7 percent from a projected 0.8 percent growth in 2009... -Dennis Gadil (more)

GDP revised downward

BY DENNIS GADIL AND ALBERT CASTRO

The country’s gross domestic product (GDP), which measures the country’s economic growth, is now expected to grow at a slower pace of 3.1 to 4.1 percent, down from the current 3.7 to 4.4 percent estimate...(more)

LGUs loses taxes through negligence

By DENNIS GADIL

Through sheer negligence, local government units (LGUs) have become so "demotivated" and over-dependent on their internal revenue allotment (IRA) that they have failed to maximize their taxing powers, such as the efficient collection of local taxes, according to a study by the National Tax Research Center (NTRC)...(more)

Bill mulls VAT exemption in distribution utilities

By DENNIS GADIL

In the hope of ultimately bringing down the cost of electricity, the Senate is seeking a return to franchise tax for power distribution utilities that would result to exempting them from 12 percent expanded value added tax (EVAT) and income tax.

Senate President Juan Ponce Enrile, the prime mover behind the proposed legislation, said that instead, power distribution companies should be slapped with a 3 percent franchise tax on gross income which was in force before the Electric Power Industry Reform Act (EPIRA) and EVAT laws were passed.

Prior to the enactment of Republic Act 9337, which further amended the National Internal Revenue Code (NIRC), electric, gas and water utilities were subject to a franchise tax at the rate of 2 percent on gross receipts.

But Enrile noted that since the franchise tax was replaced with EVAT and income tax, power consumers were placed at a disadvantage as energy firms simply passed on the cost of paying the taxes to them.

"More importantly, the imposition of a franchise tax which is directly absorbed by the franchisee will free the consumers from shouldering additional pass-on charges," he said.

Enrile noted that the five years under EPIRA have been marked with constant power rate hikes "that is more burdensome on the part of the consumers."

"In addition, taxes paid by industry players in the power sector became unreasonable that it encouraged an unabated transfer of the burden of what are properly costs of doing business to the consumers," he said.

Enrile has filed Senate Bill 3147, which would impose a franchise tax of 3 percent on gross distribution income of the power utility firms in lieu of all other taxes, duties and fees.

Gross distribution income refers to gross income derived by a distribution utility from all its income less all transmission and generation charges on the distributed electricity, which are passed on to the consumers, excluding all universal charges.

Back to the drawing board

BY DENNIS GADIL

Government is revising all together its economic assumptions for this year, looking at a much slower economic growth, as measured by the gross domestic product (GDP), reduced revenues and a much bigger budget deficit due to massive spending and weak tax collections...(more)

LPG regulation pushed

BY DENNIS GADIL

The Department of Energy (DOE) is supporting a partial return to an oil regulation regime, in particular for the liquefied petroleum gas (LPG)...(more)