BIZ BUZZ: Volatile markets? Blame analysts, reporters

Economic journalists covering the Financial Stability Conference hosted by the Bangko Sentral ng Pilipinas (BSP) and the International Monetary Fund in Cebu last week didn’t expect to be made into scapegoats, but if one ranking central bank official is to be believed, they are to blamed for some of the country’s financial troubles.

Speaking to representatives of 14 central banks and finance regulators from across the Asia-Pacific region as well as top officials of the Switzerland-based Financial Stability Board and several other global organizations, BSP Senior Assistant Governor Winnie Santiago had no qualms about telling the audience just exactly how she felt about members of the media, people who were present told Biz Buzz.

This came after a question was raised on what to do when the markets go crazy because the available information is very little or even “false.” The example given was when the circulating narrative is, say, the Philippine peso might be depreciating sharply toward certain levels, like 60:$1 or even beyond.

Santiago had it figured out: The problem is not so much as over-communication, but irresponsible communication. And for her, the solution is simple: financial news sources, including private-sector pundits, should just stop talking to journalists.

“Given the reporters in the Philippines, their tendency to misinterpret or misrelay [statements from news sources], it would be better if some of our economists and people refrain from being interviewed,” Santiago said.

Santiago—who is in charge of BSP’s treasury operations— went on to say that amid the foreign currency exchange fallout, BSP officials had to make the rounds of bank bigwigs to discipline talkative analysts, “because the peso went crazy after they were interviewed by reporters.”

“For me, it’s more of the irresponsible [ones], or you know you’re playing into their (journalists’) hands but still do it (interviews),” she said.

And then BSP managing director Tony Lambino, who was session moderator, asked for any journalist present to share their thoughts.

As a ground-zero eyewitness described it, a collective gasp permeated the hotel ballroom when the crowd realized that the purported misinterpreters were among them.

Jerome Morales of Reuters explained that talking to subject experts to make sense of vital but perhaps not easily understood information is a basic task of journalists, who also cannot quote themselves. Thus, government and private-sector experts who accommodate journalists’ questions are much appreciated as they help the public understand statistics and developments that might otherwise be esoteric, or worse, a cause of nosebleed.

So where should Filipinos now go for insights about their economy? Without analysts and reporters, maybe they should just rely on fake news purveyors and pretend pundits on social media? Abangan! —Daxim L. Lucas

Taxing digital entrepreneurs

A proposal of the Bureau of Internal Revenue (BIR) has online sellers up in arms nowadays as it might derail the development of the e-commerce sector.

According to sources, the agency is determined to introduce the collection of 1 percent creditable withholding tax on one-half of the gross remittances of online platform providers to their partner sellers or merchants.

The BIR plans to implement this new regulation in early to mid-July despite the growing opposition that the proposed policy is getting from consumer protection advocates. These advocates have found an ally in Sen. Chiz Escudero who last week declared his opposition to this plan of the BIR and the Department of Finance.

The BIR proposal will affect all online sellers, food vendors, riders, freelancers and other persons offering goods or services through platforms, mainly because it is also an upfront deduction of revenues.

This is unfair to those earning P250,000 a year or less, as these small business entrepreneurs should be exempt from income taxes.

The new regulation also requires tedious reporting requirements and documentation which will weigh heavily, especially on the business owners. The additional reporting and documentation will also entail added costs for them.

The move is unfair to the online sellers of goods and services using online platforms such as Lazada, Shopee, Grab or Foodpanda because there is no such regulation imposed on physical stores and others that do not transact using these online platforms.

The question is, why are the e-commerce platform providers quiet on this issue when it will affect their customers? — Daxim L. Lucas