ALLOCATION FUNCTION

NLEX-SLEX connector road key to NAIA-Clark airports link-up

MANILA, Philippines State-run Bases Conversion and Development Authority (BCDA) on Friday said the unsolicited proposal of Manila North Tollways Corp. (MNTC) to connect North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX) could cut travel time going to Clark International Airport. BCDA Chairman Felicito Payumo said the proposal to construct an elevated highway on top of the Philippine National Railways (PNR) railroad line is "strategic" because it would also link Clark airports and Ninoy Aquino International Airport (NAIA) and help decongest vehicular traffic in Metro Manila. The MNTC earlier said the 13-kilometer expressway linking NLEX-SLEX would cost about P17 billion. Payumo is optimistic that if the connector project would be awarded this year, it could be finished before President Aquino s term ends in 2016. By itself, the connector road is a game changer, Payumo said, adding that the connector would make travel time between NAIA and Clark a mere 70 minutes, or two-fifths of the current travel time. He recalled that Japan also had a dual airport system, but the linkup between Tokyo s Narita and Haneda airports was through an elevate expressway for about 10 years until the completion of an express train for speedier linkup. Payumo s statement came on the heels of a broader debate on whether to transfer NAIA to Clark Freeport zone in Pampanga or to operate NAIA and Clark airports under a two-airport system catering to both short- and long-haul flights. The debate was prodded by recent widespread criticisms tagging NAIA the world s worst airport. That tag has prompted the government to take another look at an earlier study done by Japan International Cooperation Agency (JICA) choosing Clark airport as an alternative to NAIA.

Among other factors that it deemed significant in its choice of Clark, JICA said Clark airport sits on a 2,500-hectare land and has two runways that can accommodate A380 airbus jets. But converting Clark as a real alternative to NAIA, according to Payumo, would depend largely on the connectors between the two major airports: a high-speed rail connection that can make travel time between two airports faster or not exceeding 45 minutes; and complete NLEX-Skyway connections. He added that the development of support facilities as well as infrastructure at and around Clark airport to serve both budget airlines and so-called legacy carriers would also play a big factor in determining Clark airport s growth.

Comelec asks Congress to consider Internet registration, voting

MANILA, Philippines -- The Commission on Election (Comelec) is asking Congress to amend all election laws and allow Internet registration and voting for overseas Filipino workers as the poll body targets one million new registrants before 2013 mid-term election. At the hearing of the Senate committee on electoral reform chaired by Sen. Aquilino Koko Pimentel III, Comelec commissioner Rene B. Velasco asked Congress to study the possibility of amending the Overseas Absentee Voting Act, the Automated Election Law, and the Fair Election Act to accommodate Internet registration and voting. We will study the possibility of amending existing laws in order to accommodate not only Internet registration but also Internet voting, Velasco said. He said there has been a low turn-out of registration and voting among OFWs due to lack of embassies and consular offices in or near their place of work, giving them a hard time to exercise their rights and duties under our election laws. The problem is that there are not enough embassies and consular offices to accommodate voting. Because of these (problems), OFWs need to travel to the nearest country or embassy to register and/or vote, Velasco explained. So, we are considering Internet registration and voting, he added.

For his part, Pimentel said he will consult his colleagues in Congress for the possibility of amending existing election laws on the request of the Commission to lay down the legal authority and basis for Internet voting. Kayang-kayang i-implement ang Internet voting kasi may software naman. Ang tanong lang yung legal basis or legal authority to actually implement Internet voting. Ang basa ng Comelec, we need to amend the law. I have to double check that (Internet voting can easily be implemented because the software exists. The only question is the legal basis or the legal authority to actually implement Internet voting. The Comelec thinks we need to amend the law), Pimentel said. If the law needs to be amended then we have to do it but it will depend on the legislative mill. Basta sabi ng mga suppliers, just give them sufficient time. Kaya naman lahat eh (The suppliers said they should only be given sufficient time and everything can be done), Pimentel explained. He also added that there was no opposition on the proposal for Internet voting but he believes some people in Congress will raise the issue of integrity and security of the system. Walang opposition ito. My concern is somebody will raise the issue on its integrity and security and if they (Comelec) adequately answered those concerns, I believe no one will block the measure, Pimentel said. Comelec is targeting one million new registrants before the 2013 mid-term elections. In the 2007 elections, around 16 percent voted out of some 500,000 registered OFWs voters under Overseas Absentee Voting Act. And in 2010, the turn-out rose to 26 percent out of more than half a million registered voters.

DISTRIBUTION FUNCTION

World Bank urges PH to hike tobacco, alcohol taxes By Ted P. Torres, The Philippine Star Posted at 01/01/2012 10:34 AM | Updated as of 01/01/2012 10:35 AM

MANILA, Philippines - The World Bank has urged the Philippine government to increase the share of excise taxes on tobacco and alcohol to nearly 1.3 percent of gross domestic product (GDP) in the next five years. In a report, the World Bank said the move would not only increase its income share to the government coffers but the additional revenues can be used to improve health services and social protection. Likewise, the incremental revenue would enable the government to increase its human and physical investment to improve the country s growth and development prospects, the World Bank report said. It added that this would also address the large negative externalities arising from smoking and drinking, and to discourage their consumption. Over the medium term, higher excise rates would induce the poorer households to reduce consumption compared to wealthier households, thus savings from reduced consumption (by the poorer households) can be channeled to food and human capital investment to enhance their welfare, the World Bank said in its latest Philippine quarterly update. The report recommends specific taxes over ad valorem, stating that specific taxes are automatically and frequently indexed to inflation. Ad valorem excises are more complex to administer since the value of the product has to be ascertained and is prone to transfer pricing abuse. This leaves more opportunities to challenge the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) assessments as opposed to specific excises, which simply require counting physical quantities, it said. For tobacco, the World Bank recommends a shift to a uniform excise tax rate for all cigarette brands. The Philippine government must raise excise tax rates to achieve an

average excise to retail sales price (RSP) ratio of 50 percent in 2012 (and 60 percent by 2016), and index excise rates to nominal GDP. By indexing, the excise tax rates to nominal GDP growth will keep the excise burden from falling, avoid revenue erosion in the future, and provide funds to improve health services. It further suggested that government must ensure all tobacco taxes are subject to specific tax rates, including cigars. The move will further improve administrative efforts to minimize leakages from smuggling due to the proposed higher tax region, it added. The rationale behind the World Bank recommendations is that a shift to a uniform excise tax rate for all brands will remove production distortions, discourage consumption, and improve equity across brands. The current multi-tier price classification system has no clear policy rational and is unique internationally. It therefore should be abolished, it added. The report said that the Philippines must bring the excise rate closer to regional rates while increasing revenue. Philippines reflect a 48.2 percent tax burden to retail sales price while Thailand slaps 73.2 percent to RSP; Indonesia with 51.8 percent to RSP; Pakistan with 69.3 percent; and China with 62.2 percent. For alcohol, the Philippines reflects an excise to RSP of 26.1 percent for beer and 5.5 percent for wine. In Thailand, it is 55 percent for beer and 25 percent for wine; in Vietnam, 50 percent for beer and 25 percent for wine; in Cambodia, 30 percent for beer and 10 percent for wine.

8 Types Of Non-Taxable Income By Michael Diaz Published January 16, 2012

It s almost time for tax season. Everyone knows that your earned wages will be taxed by the IRS. What many people do not realize is that there are numerous sources of income that are not taxed by the federal government. If you can increase your income from these sources, then you will reduce your overall tax burden. But what are these sources and how can you take advantage of them. Here are eight sources of income that are not taxable under the federal tax code.

Interest Earned From Tax Exempt Municipal Bonds As the name suggests, interest earned from tax exempt municipal bonds is not subject to federal taxes. In fact, many states also give state tax exemption if the bonds were issued in the state in which you file your taxes. This tax exemption applies to both individual tax exempt municipal bonds and to shares in tax exempt municipal bond funds. Be aware that there are taxable municipal bonds that do not benefit from federal or state tax exemption. Make sure that you pay close attention to the tax status of any municipal bond or municipal bond fund that you purchase. Income From The Sale Of Your Primary Residence If you sell your primary residence for a profit and pass the IRS tests for home use and ownership, then a portion of your income for the sale will be tax exempt. To pass the tests, you need to prove that you have owned your home for at least two of the past five years. You also need to prove that it is your primacy place of residence. If you can do this, then you can exclude up to $250,000 of capital gains from you taxable income. If you file jointly with your spouse, you can exclude up to $500,000. If you don t meet the two year test, you may be able to get a partial tax exemption for the income earned from the sale. Life Insurance Money It is not pleasant to think about, but if a loved one dies and you are the beneficiary of their life insurance policy, you will generally not have to pay any taxes on the life insurance money that you receive. You should note that there are some exceptions to this rule. You should consult with the IRS or a tax specialist for further information about when life insurance disbarments can be taxed. Non-Taxable Gifts A gift is exactly what it sounds like. According to the IRS, a gift is any transfer to an individual that the individual does not fully pay for. Some gifts are taxable. However, a good many are not. For example, in 2011, you can give a person up to $13,000 without any party being taxed. Other types of gifts that can qualify for tax exempt status include tuition or medical expenses that you pay on behalf of someone else, gifts to your spouse, and gifts to a political organization. You should speak with a tax expert before giving a gift to make sure that you take full advantage of the potential tax benefit. Employer Fringe Benefits There are numerous fringe benefits that employers give to their employees. Some companies offer their employees subsidies for public transportation. This can include subway cards, bus passes or cab fares. Additionally, some companies also offer parking subsidies to their employees that drive to work. As long as these subsides are not valued more than $230, you can receive these subsidies tax free. Other tax free fringe benefits include free gym membership, use of a company car and employee discounts.

Child Support If you are the parent with custody of the child, you do not have to report child support payments to the IRS. You should note that spousal support is not necessarily tax exempt. Foster Care Payments If you take care of foster children, you will receive payments from the state to help with expenses. Since these payments are made by a state agency or tax-exempt organization, you do not have to report them to the IRS. Personal Injury Awards If you have been issued financial awards because of a personal injury suit, you might not have to pay taxes on the money awarded. You should speak with a tax professional to determine whether you need to report the funds you received from a personal injury suit. When tax season rolls around, many people focus on the financial items that they are required to report. However, we could all benefit from taking a closer look at the income that we don t need to report. If you can take advantage of these sources of tax free income, you will be able to save money during tax time.

STABILIZATION FUNCTION

Japanese investor breaks ground at Bagong Nayong Pilipino EARL VICTOR ROSERO, GMA News January 26, 2012 4:53pm

The fourth major investor in the Bagong Nayong Pilipino entertainment complex forged ahead with a $2-billion integrated resort project Thursday on a 45-hectare site at the Manila Bay Reclaimed Area, saying that the venture will create 15,000 jobs. Japan-based Universal Entertainment Corp. noted its Manila Bay Resorts venture will become the next major world-class entertainment, shopping and gaming destination in Asia. Its subsidiary, Tiger Resorts, Leisure and Entertainment Inc., said construction will commence next February while the formal opening is expected in the third quarter of 2014. The entertainment complex will have two luxury casino hotels hosting 450 and 600 rooms, respectively... A 1000-room budget hotel will also be put up within the resort, targeting to reach a wider market, the resort developer said. Tiger Entertainment unveiled this scale model of its Manila Bay Resorts project during groundbreaking rites on Thursday at the project site in the Manila Bay reclaimed area. Earl Rosero Speaking through an interpreter, Universal Entertainment chair Kazuo Okada said construction will start with the large-scale water fountain and then progress to the other components, including an indoor beach club encased under a huge glass dome. The complex will also have high-end fashion boutiques and outlet malls. Manila Bay Resorts seeks to attract business travelers and tourists from all over Asia especially the Chinese market, according to Tiger Resorts. The tourism markets of Japan, South Korea, Singapore and Hong Kong were also eyed. Attracting $5B in investments Philippine Amusement and Gaming Corp. (PAGCOR) chair Cristino Naguiat Jr. said in an interview with reports the whole Bagong Nayong Pilipino complex will be up and

running in 2014, noting the whole complex can easily attract at least $5 billion in investments. The three other investors in Bagong Nayong Pilipino are Bloomberry Resorts and Hotels, Travelers International Hotel Group Inc., and Belle Corp. all of which were signed up during the Arroyo administration. Naguiat noted that Bloomberry and Belle Corp. are already halfway through their respective construction projects. He also said the Bagong Nayong Pilipino complex may have room for a fifth major project, in which new investors could collaborate with the four proponents now on board. PAGCOR is primed and ready to take on the challenge to position Manila to be one of the world's entertainment and gaming capitals. We assure our partners of full support, not only from PAGCOR, but also from other government agencies, Naguiat said in his remarks during the groundbreaking ceremony. We look forward to a long and fruitful partnership with you. It's time to roll up our sleeves... We are very, very optimistic that this project will succeed because gaming and entertainment is more fun in the Philippines, he added. Impact on 400,000 lives Director-general Lilia B. de Lima of the Philippine Economic Zone Authority (PEZA) said that Universal Entertainment is not a new investor and is familiar with the Philippines because it already operates in Laguna a slot machine production plant, which she said is poised to hire an additional 5,000 workers. The Manila Bay Resorts' 15,000 jobs target plus the 5,000 from the 10-hectare expansion of the slot machine plant will likely create indirect employment for 80,000, De Lima noted. Each Filipino wage earner supports an average of five persons, De Lima added, saying the impact of 80,000 direct and indirect employment will redound to the lives of at least 400,000. She said the Japanese are the biggest investors in the country's 250 economic zones and are responsible for at least 40 percent of total projects. VS, GMA News

May 1 jobs fair targets unemployed, fresh grads By Estrella Torres, Business Mirror Posted at 04/20/2011 7:48 AM | Updated as of 04/20/2011 10:59 AM MANILA, Philippines - Labor Secretary Rosalinda Baldoz called on the unemployed and graduates fresh from college to fill up the demand for workers and staff in the key employment generator (KEG) industries that will offer 30,000 job vacancies in the forthcoming May 1 jobs fair. The labor chief said that among the hard-to-fill job vacancies include academic coordinators, computer teachers, fashion designers, graphic artists, visual-display artists, labor-relations experts, as well as staff to be employed in credit and collection work. The country s KEG industries are also in need of experts in the heavy equipment, like safety engineers, mechanics and automotive technicians. The growing hotel-and-restaurant industries in the country are also in need of hard-tofill staff positions, such as food-and-beverage managers, work-flow managers, receptionists, promotion officers, kitchen staff, and dining personnel, inventory-control staff, as well as maintenance crew and promodizers. For students taking up college or technical-vocational courses, they are well advised to consider taking up studies, degrees, or training focused or related to these KEGs and emerging industries to ensure that they will have jobs after graduation, said Baldoz. The labor chief said the KEG are industries that have been identified in the labor market study of the Department of Labor and Employment that will generate in-demand and hard-to-fill occupations in the next 10 years. The department also identified four emerging industries, which are creative industries, diversified/strategic farming and fishing, power and utilities and renewable energy. Baldoz urged job seekers to tailor fit their qualifications by undergoing skills training and enhancing their capabilities to establish careers in these emerging industries.

Bicol University College of Business, Economics and Management Daraga, Albay

PROJECT IN PUBLIC FINANCE

Submitted to: Prof. Clea Bongat

Submitted by: Marie Abegail A. Lorayes AB- Economics- III