Biz Buzz: Impressing Duterte

At the Asean+3 Finance Ministers’ and Central Bank Governors’ Meeting in Yokohama last Friday, it was “CGD” (staffers’ shorthand for Finance Secretary Carlos G. Dominguez III, and “DCG” (Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo) who led the Philippine delegation and co-chaired the meeting with Japan.

We heard outgoing BSP Governor Amando Tetangco Jr. was advised by his doctor to take a break following his attendance at last month’s spring meetings of the World Bank and the International Monetary Fund in Washington, hence Guinigundo was sent in his stead.

Seated next to each other at the press conference following the meeting (together with Japan Deputy Prime Minister and Finance Minister Taro Aso and Bank of Japan Governor Haruhiko Kuroda), it was noticeable that Dominguez seemed impressed whenever Guinigundo ably answered questions from the media.

Later asked by reporters about Guinigundo, Dominguez said: “He’s a smart guy. He’s smarter than me. Of course, I’m impressed! But so is ‘ano,’” obviously referring to someone important. Pressed if that “someone” is President Duterte, who is expected to name Tetangco’s successor in the next few days, Dominguez replied: “I don’t know. I’m not Rody. I can’t say what impresses him or not. But there are certain things I can tell impresses him.”

Asked further if the front-runner among the candidates for BSP governor could have had impressed the President, Dominguez was still tight-lipped, only replying: “Maybe.”

According to Dominguez, the ultimate decision on who will be in charge of the country’s monetary policy over the next six years lies with President Duterte. “I’m not the ‘decider-in-chief’,” the finance chief said. —BEN O. DE VERA

APO in the crosshairs

In the ongoing investigation by the Bureau of Internal Revenue on the allegations of tax evasion against Mighty Corp., the focus of the tax agency is now on APO Production Unit Inc., a government-owned company in charge of printing official materials—like the controversial cigarette tax stamps that the cigarette manufacturer allegedly reused to avoid paying the correct amount of taxes.

Biz Buzz hears that the BIR brass is unhappy with the amount of cooperation they’re getting from the officials at APO, which is actually under the broad supervision of the Presidential Communications and Operations Office, similar to its sister unit, the National Printing Office).

Why is the BIR unhappy? Simply put, it’s because its investigation has ground to a crawl because “third parties have yet to submit relevant documents in relation to the investigation despite repeated request from the BIR.”

“Of particular concern is APO which, to date, has not yet fully complied with the BIR’s documentary requirements,” according to an update shared with Biz Buzz. “As early as September last year, the BIR already gave them a list of documents needed but still no compliance,” the insiders said. “There has been a change of officers but despite that and some reasonable amount of time, still no compliance thereby delaying the entire Report of the BIR’s National Investigation Division (NID).”

Why is this an issue? Basically, it’s because investigators are trying to determine whether the stamps found on Mighty’s cigarette packaging were truly fakes (along with the cigarettes themselves, as the company claimed) or if the stamps were printed on legitimate security paper, affixed with reused quick reaction (QR) codes that look legitimate with a cursory visual inspection.

If it’s the latter, it could mean that APO was complicit in helping a company evade paying the right amount of taxes.

“APO is a government entity but has not been helpful to BIR,” said the insider, who explained that the BIR was particularly interested in the government printer’s data from the 2010-2016 period.

More importantly, the all-important data that BIR needs from the 2014 to 2016 revenue periods have still not been turned over to it by APO and other government agencies. Is this just a bureaucratic delay or a more deliberate one?

No less than Finance Secretary Carlos Dominguez III wants to get to the bottom of this issue, we hear. Uh-oh. —DAXIM L. LUCAS

The crux of the matter

Last week saw businessman Atong Ang—an operator of the small town lottery scheme, which is basically a legalized form of the “jueteng” illegal numbers game—take potshots at Justice Secretary Vitaliano Aguirre II for allegedly favoring his rival, casino junket operator Kim Wong, in their business dispute.

Ang has, of course, alleged that his very life was in danger because he was up against powerful personalities.

But Biz Buzz has learned that his outburst last week might be due more to a powerful piece of paper signed not too long ago by no less than President Duterte. We’re talking about the President’s ominously numbered Executive Order No. 13 titled “Strengthening the fight against illegal gambling and clarifying the jurisdiction and authority of concerned agencies in the regulation and licensing of gambling and online gaming facilities, and for other purposes.”

The EO’s title is quite a mouthful, but it really signals just one thing: A massive crackdown on illegal gambling—something that previous presidential administrations tried to stop or suppress, but failed. And in this latest effort, President Duterte has put in charge one of his trusted men at the Office of the President, Undersecretary Jesus Melchor Quitain, the former city administrator of Davao City.

According to the EO signed into effect last February (but only coming to light recently), Quitain is the new sheriff in town in charge of the fight against illegal gambling. As such, all government agencies involved in gambling as well as special economic zones which have their own charters that allow online gaming will—you guessed it—report to him.

The EO was meant to, among others, rein in the proliferation of online gaming operations that have sprouted surreptitiously across the country, but which don’t yield any meaningful benefits to the government in terms of taxes and royalties.

The state-owned Philippine Amusement and Gaming Corp. now also coordinates with Quitain in the drive against illegal online gaming, having managed to kill fly-by-night operations by mandating new licensing requirements for the industry.

And here lies the root of the Atong Ang-Kim Wong dispute, we’re told. Wong—the country’s largest casino junket operator—was able to secure Pagcor licenses for his online gaming operations, making them fully legitimate. His business rivals, however, were not able to turn a new page, either because they were unable to apply or failed to meet regulatory requirements, sources told Biz Buzz.

And because of this, Ang is now in the crosshairs of Quitain whose mandate is to stamp out illegal gambling. If that’s indeed the case, well, tough luck. —DAXIM L. LUCAS