The Unlawyer

The proposed 2007 Philippine tax amnesty law I first discussed in February, then spoke of again in March, lapsed into law today. I don’t have the details yet of what the contents of this law is but my sources say both houses of Congress adopted the Senate’s version, with a few minor changes.

Why the rush to pass this measure that, according to my sources, was handed to the House by a Senate that was bent on getting its way?

“In view of the presidential election in 2010 and a Senate likely dominated by the opposition, it was pointed out during the meeting that a controversial measure such as a tax amnesty may have less chance of hurdling the 14th Congress.”

While this law was being deliberated in Congress, observers were no doubt amused to discover that Negros Oriental representative Herminio Teves, chairman of the powerful Ways and Means committee, was all for its enactment while his son, Finance secretary Margarito Teves, was against it.

Interestingly enough, the bill was not brought before Congress’ bicameral conference committee, which is usually resorted to when both chambers cough up different versions of a proposed law covering the same subject matter. The drafting of the amnesty’s implementing rules and regulations will be handled in part by the House Oversight Committee.

Moving on: the Philippine peso reached another high the other day when it breached the PHP 45 barrier, closing at PHP 45.87 to the US dollar in yesterday’s trade, despite intervention by Philippine central bank officials.

While administration officials will no doubt be quick to grab the credit, the Bangko Sentral ng Pilipinas offered this simple explanation:

“Deputy Governor Diwa Guinigundo, officer in charge of the central bank, said cash inflows from overseas Filipino workers (OFWs) through banks were strong because of the enrollment season for the incoming school year.

“Guinigundo said the weak US currency was also prompting OFWs to send home more dollars for the needs of their loved ones.”

The strengthening Philippine peso plus the renewed vigor exhibited by the stock market means to say that market pundits are generally satisfied with the conduct of the recent elections and its likely outcome – in so far as the senatorial and congressional poll results are concerned anyway – and is a vote of confidence in the country.

Standard Charted Bank even thinks that the peso reaching PHP 44 against the US dollar is highly possible:

“On Wednesday, the peso retreated from Tuesday’s close of 45.87 to the dollar and finished at 46.04. But currency traders said strong foreign buying of Philippine stocks and heavy inflows of foreign exchange from overseas Filipino workers ahead of school opening in June continued to support the peso.”

The Philippine Institute for Development Studies (PIDS) cites one reason why the Phillippines lags behind its Asian neighbors in electronic commerce:

“… mainly due to the high cost of putting up an e-commerce web site.”

Take for example the cost of setting up an electronic payment gateway for your site. As Jozzua recently explained:

“Remember PayPlus? It’s an online payment system developed by the guys at Yehey.com. Well last year, they had some trouble with some fraudulent transactions and the service was temporarily halted. They are relaunching it soon as Kaban (kaban.com.ph) with a whooping P50,000 setup fee and 6% per transaction charge. Why the large fee? Well they seem to want to prequalify the merchants. Needless to say, the small businesses are out. They are, however, open to terms. You pay 50% down payment for the setup fees and settle the rest as you go along.”

Six percent per transaction? A medium-scale business can easily absorb the one-time charge, but will certainly balk at the transaction cost. I’m curious how the fine folks at Kaban will justify that.

The most successful Philippine e-commerce site to date should be none other than Cebu Pacific airlines’ online ticketing system.