Airlines Seek Customs Overtime Padding Probe

Airline industry is willing to cooperate with the Ombudsman in investigating a complaint filed by airport Customs examiners against their immediate seniors for apparently stuffing their overtime claims with airline companies, and pocketing, instead of distributing properly, the money that is being collected.

The spokesman for the Board of Airline Representatives (VBAR), Mr. Bayani Agabin, mentioned yesterday that the complant supports “our longstanding suspicion of overcharging and abuse of this overtime arrangement. We are thankful that the present administration has decided to do away with the backward practice of a single shift from 8 in the morning to 5 in the afternoon plus overtime, and instead operate 24/7 on three shifts at key ports as is done worldwide.”

Airlines paid airport Customs approximately P2 billion since the early 1990s until 2005, unfortunately when they decided to stop paying, airport Customs sought them to double their charges.

There about 200 Customs employees at the airport. Which then the airlines challenged the overtime practice in court, arguing that Customs employees are government staffs, not theirs.

The complaint before the Ombudsman was filed in August 2009 by some examiners who did not get their share.

Agabin said that it will send a strong message to stumbling civil servants and that the resolution of this case would resound across the government.

Agabin also mentioned that the Ombudsman should find out if the check payments from individual airlines were deposited to the government accounts and it is properly accounted and distributed, whether the recipients professed that these are part of their taxable compensation income.

“If they encashed the checks and divided it among themselves, then this constitutes malversation which carries a maximum penalty of life imprisonment,” he said. “This may also amount to a violation of Civil Service Commission rules on double compensation, Commission on Audit rules on accounting and disbursement of funds, and tax laws on payment of taxes on income.” Agabin added.

According to the complaint, Customs collectors prepare two sets of payroll.

One is presented to the airline that shows the complete list of examiners even if some are actually absent, on leave or had been transferred, while the other is the “final payroll” where those actually absent were taken off the list and their share is allegedly pocketed by the superiors, the complaint said.

The airport Customs personnel is also been abused this overtime practice by adding meals and transportation allowances to their billings, and charging four times if four planes land for the same hour they serve, he said.

PAL Adds, Cancels Flights For Holy Week

Philippine Airlines (PAL) is regulating its operations on Holy Week by adding 6 extra flights to 3 destinations and developing 20 international and 2 domestic flights by using larger aircraft.

An additional flight will be attached to and from the following destinations: Taipei and Puerto Princesa City on the 8th of April while on the 9th will be at Hong Kong.

The flights that will use larger aircraft to lodge more passengers are those to and from Shanghai (Pudong airport) on April 4; Xiamen, Taipei, Shanghai, Hong Kong and Beijing on April 5; Puerto Princesa City on April 7; Hong Kong, Xiamen and Beijing on April 8; and Xiamen on April 9.

PAL domestic operations will be scaled down with the cancellation of 38 flights to 7 destinations on Good Friday, Black Saturday and Easter Sunday to permit PAL employees to at least witness Holy Week practices.

On Good Friday, particular flights to and from will be cancelled such as cities of Cotabato, Cagayan de Oro, Cebu, Iloilo, Davao, Zamboanga and Tacloban. While on Black Saturday, certain flights to and from Cebu, Cagayan de Oro and Davao will be also withdrawn.

On Easter Sunday, one flight each to Cebu, Cagayan de Oro and Zamboanga will similarly be canceled.

Visit the PAL website for a complete list of canceled, upgraded and additional flights (www.philippineairlines.com) or call PAL Reservations at 8558888.

Passengers are recommended to arrive earlier than usual at the airport, also that they double check travel documents (passport, tickets, etc.) and minimize bringing bulky carry-on baggage to avoid aggravations.

Business Incorporation in the Philippines: How to Incorporate Legally.

by: Austin Shi

Date published: 4/4/2011

From Doing Business in the Philippines Blog

In starting and incorporating a new business in the Philippines, a foreign company faces a number of bureaucratic and legal hurdles that make the entire process both complicated and tedious. However, if armed with the right information, the company will be able to overcome these initial difficulties, and incorporate the business successfully in the Philippines. A number of things must be taken into consideration in incorporating a business in the Philippines. The company must first determine the best investment vehicle for setting up operations in the country, and register the business with the relevant government agencies, including the Philippines Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI) and the Bureau of Internal Revenue (BIR).

According to Business Consultant Gregory Kittelson of Philippines consulting firm Kittelson & Carpo Consulting,

Mr. Gregory Kittelson

Mr. Gregory Kittelson

“Incorporating a business in the Philippines is a long and somewhat complicated process for foreign owned companies and could become problematic down the line, even if the company is 100% compliant from the very beginning.  It is imperative to either know the exact incorporation steps yourself and ensure they are implemented on time or find a company or individual who specializes in Philippine business registration to assist you.”

Moreover, special income tax holidays and regimes are also available to foreign companies interested in setting up and incorporating a business here in the Philippines. In order to become eligible for these benefits, companies must first comply with a list of government-issued requirements, including business registration with government agencies like PEZA and BOI. There are four possible options in setting up and incorporating a business in the Philippines. A company may choose to set up a fully-foreign owned branch office, a fully-foreign owned representative office, a fully-foreign owned domestic corporation or a 60/40 subsidiary. Each of these options have their own advantages and disadvantages, and a foreign company must incorporate the business according to what is most beneficial.

In incorporating a business in the Philippines, the following steps must be followed: Procedures may vary according to the type of company being registered, but the general procedure is essentially the same.

  • Determine the Availability and Reserve a Company Name with the Philippine Securities and Exchange Commission (SEC)
    • This can be done through the SEC’s online verification system, free of charge.
    • Once approved by the SEC, reserving a company name costs about Php 40.00 a month for the first 30 days.
    • Company names can be reserved for a maximum period of 90 days (or three months), for an average fee of Php 120. This can still be renewed upon expiration.
  • Depositing a Paid-up Capital to the Authorized Agent Bank (AAB) in order to obtain a Certificate of Deposit
    • A company is required to deposit a paid-up capital amounting to at least 6.25% of the corporation’s authorized capital stock.
    • This paid-up capital must not be less than Php 5,000.
  • Notarizing the company’s Articles of Incorporation and Treasurer’s Affidavit
    • A company’s articles of incorporation must be notarized in any notary public, before filing with the SEC.
  • Registering a company with the Philippine Securities and Exchange Commission (SEC)
    • A company can register online, but payment must be done in person.
    • The following documents will be needed, in registering your business:
      • Company name verification slip
      • Notarized articles of incorporation and by-laws
      • Notarized Treasurer’s Affidavit
      • Statement of Assets and Liabilities
      • Certificate of Deposit on the Paid-in Capital
      • Bank authorization to verify the account
      • Company Data Sheet
      • Written and Notarized undertaking to comply with all SEC requirements
      • Written and Notarized undertaking to change company name.
  • Upon registering with the SEC, companies must pay the Documentary Stamp Tax (DST) for the original issuance of shares for domestic corporations or subdsidiaries.
    • The DST must be paid on or before the 5th day of the following month, from the date of the company’s registration with the SEC.
  • Obtaining a Community Tax Certificate (CTC) from the City Treasurer’s Office (CTO)
    • The company is assessed a basic and an additional community tax. The basic community tax rate is dependent on the type of corporation registered, while the additional community tax is pegged on the assessed value of the property a company owns in the Philippines.
  • Obtaining a Barangay Clearance
    • A barangay clearance is required to obtain a business permit from the city or municipality
    • The barangay charges a fee to the company, which is fixed in each barangay. This fee may vary for barangays in the Metro-Manila area.
    • A minimum of Php 500 is charged, with an additional Php 300 for the barangay clearance plate.
  • Obtaining a License to Operate at the Licensing Section of the City Mayor’s Office
    • For businesses setting up operations in the City of Manila, a company must first submit a business transaction form (BTF) containing all of the information for the application, before obtaining a business permit. This document can be obtained at the Manila City Business Center (MCBC).
    • In addition to the BTF, the following documents must also be submitted:
      • Barangay Clearance
      • SEC Registration
      • Occupancy Permit of the Building/Unit Leased
      • Public Liability Insurance (for restaurants, malls, etc.)
      • Authorization Letter from the Owner (with ID)
      • Lease Contract/Tax Declaration
      • Community Tax Certificate

The zoning, engineering, and fire safety departments must also inspect the office space leased by the company. Upon inspection, strict compliance must be observed in complying with the additional requirements that may be imposed by these offices.

  • Registering for Taxes at the Bureau of Internal Revenue (BIR)
    • To register with the BIR, the company must first accomplish BIR form 1903 together with the required documentation and submit it to the Revenue District Office.
    • The newly registered company is required to first pay the Documentary Stamp Tax (DST) on the originally issued shares (for domestic or subsidiary companies), as well as the DST on the lease contract (if the office space used by the company is being leased). The payment for the Documentary Stamp Tax on the originally issued shares for domestic or subsidiary companies is due on the 5th day of the following month from the notarization of the document.
    • An additional requirement for business registration is BIR form 1906 or the authority to print receipts.
    • Companies are assessed through various taxes, including but not limited to a value added tax (VAT), a community tax, a local tax and an income tax.
    • Generally, companies are expected to comply with the periodic reporting and payment of income tax, Value-Added Tax (VAT), Expanded Withholding Tax and Withholding Tax on Compensation. Additional taxes or exemptions to taxes, based on company type, should be properly registered or reported to the BIR.
  • Initial Registration with the Social Security System (SSS)
    • To be considered an employer, the company must have at least (1) employee.
    • An employer is required to register with the SSS, using the employer registration form (R-1), the employment report (R1-A) and the specimen signature card (L-501). The employer is also required to submit an employer registration form (R1) and an employment report (R1-A) to the offices of the Philippine Health Insurance Company.
    • The SSS issues the company an employer number, together with the employer’s copy of a processed BR-1, an employer identification card or an SSS registration plate, and a list of employer obligations and post-registration requirements. The SSS registration plate is a mandatory requirement for registration and companies are required to pay a fee of Php 165.00 for it. The plate is released 6 months after the application and payment.
  • Completing Registration with the SSS and the Philippines Health Insurance Company (PhilHealth)
    • The company must submit the following documents to the SSS within 30 days from the issuance of an employer number:
      • Employment Report (form R-1A)
      • Specimen Signature Card (form L-501)
      • Sketch of Business Address
      • Validated Miscellaneous Payment Return Form (Form R-6)
    • The company must also submit the following documents to PhilHealth:
      • Member registration forms for each employee and the required documentation.
  • Registration with the Home Development Mutual Fund (HDMF) or the Pag-Ibig Fund
    • Registration with the HDMF is dependent on the company’s SSS registration. Only employees duly registered with the SSS are qualified to be registered with the HDMF.
    • In registering with the HDMF, the company is required to submit the following documentation:
      • Employer Data Form (EDF)
      • Membership Registration/Remittance Form (form M1-1)
  • Payment of the Initial monthly contribution of the employees, which will serve as a proof of registration for the company.
  • OFW Demand Stabilizes Philippine Economy

    By: Kathleen Yu

    Manpower resources are one of the Philippines’ greatest exports. Presently, over eleven percent of the population are employed as Overseas Filipino Workers (OFWs) and Filipino communities are found in almost every industrialized nation in the world. The OFW diaspora regularly injects dollars into the economy in the form of remittances from Filipino professionals working abroad sending money home to their families. This has assisted the Philippine government immensely, and kept the local economy afloat.

    There are over 8 million registered Filipinos working abroad with the United States alone employing over 3 million Filipino migrants. Despite the global recession, Filipino professionals working in the US remitted over $17.3 billion in the last year alone, an estimated 5.6% increase from the 2008 figures. Saudi Arabia employs over 900,000 OFWs and the numbers are growing.

    Overseas Filipino Workers are appropriately termed “modern day heroes” because of the sacrifices they make in leaving their families to work abroad. Most of them are blue collar workers, employed in jobs like caregiving, nursing and housekeeping.

    The Philippine Overseas Employment Administration (POEA) is a government agency that monitors and assists OFWs working abroad. OFWs are required to register with the POEA, while in the process of applying for working visas and other permits to go abroad. The POEA is also tasked with registering and monitoring recruitment agencies in the Philippines to ensure that no OFWs are led into forced labor, and other forms of abuse.

    According to corporate lawyer Amanda Carpo, legal counsel of Makati-based firm Kittelson and Carpo Consulting, “The number of overseas recruitment agencies setting up operations in the Philippines is growing at an exorbitant rate. This is primarily because OFWs are considered a global commodity. Higher salaries and superior living conditions have lured a large number of OFWs abroad, and more and more Filipinos are following in their footsteps. This bodes well for the Philippine economy, which can only stand to gain from an increase in OFW remittances.”

    On the other hand, as the Philippines undergoes a change in government and the job market abroad gets continually more competitive the question arises as to whether or not Filipinos will continue to venture abroad, in search of greener pastures. With such a competitive overseas job market, OFWs may be returning home to the Philippines making for highly-skilled overseas trained employees. The Philippine government should be prepared to respond to these scenarios and to support the OFWs who have been and continue to be a positive force in the economy.

    Halalan 2010 PCOS Machine Election Automation VS Manual Voting Results

    Manila Philippines – What do you think are the pros and cons of having an automated election? There are several issues and benefits regarding this automation of election. The question is, are you in favor of this automated election, are you satisfied in what you have paid in a billion pesos? Would you rather consider the short line for manual voting rather than than of long lines because it became a clustered precinct? As of May 11 We have partial results came from the PCOS machine and being announced by chairman melo of COMELEC, or would you choose the manual voting that the output might result in less than a week?

    There are things that needs adjustments at first just like the PCOS machine, because things that are first tested are not guaranteed a 100% full accuracy sometimes it has bugs and other errors which are very usual to machines, but the thing is that the Smartmatic should put IT professionals or Technician who knows well of the PCOS machine and the Smartmatic should test the machine first before they distribute and if lack of time is the reason for this bugs in the PCOS machine, the thing that the Smartmatic should do is to hire more people in their company even for a month only just ti verify that the smartmatic is working great and reliable in counting of votes. The more people that works on the smartmatic the more productive or the more reliable the PCOS machine will be. The smartmatic should also foresee some of the risk that might happen when using the machine so that the technician will know what are the things that he needs to do to be able to fix it as soon as the election starts. Well In the manual voting there are several watchers and teachers that are need to be present just to be able to count the votes that sometimes none of them seem to do their task. The advantage of the PCOS machine is that it makes the counting easily, is makes less people involve in election counting, less effort and many more compared to manual voting that requires opposite of the automated election. A little advice is that before releasing of the machine be sure that it is working and complete in everything that is needed in the election and there should always be a person or technician or IT professionals who knows how to troubleshoot and Be sure to know what are the error and later on fix or enchance the PCOS machine for the next election.

    Hundreds remember Cory in Washington D.C.

    WASHINGTON D.C. Hundreds came to remember, and to honor former President Corazon Aquino at the historic St. Matthews Cathedral.

    Her portrait welcomed churchgoers.

    Fil-Ams joined friends and family of Mrs. Aquino who attended the memorial mass. Three cousins of her husband, former Sen. Benigno “Ninoy” Aquino Jr., live in the area.

    The mass was officiated by Msgr. Ronald Jameson and Filipino priest Jose Opalda.

    It was the second time mass was being celebrated for a Philippine president in St. Matthews, the seat of the Catholic Archdiocese of Washington DC.

    Read more…

    Why Iraq?

    In the mid-eighties when I entered the seminary to check if ever I really had the vocation to the missionary life, one of the reasons why I decided to join the Scalabrinian Congregation was due to my family situation. My father was then working as a mechanic in Saudi Arabia. I also had a brother in Kuwait and another brother who was a seafarer.

    That time, there were also my aunties who were working as nurses in Canada who later on asked their families to join them as immigrants. Later did I realize that we will become a family of migrants.

    Read more…

    Crossing Borders happened – Atty. Mike Templo

    I’ve been hosting a talk show on ANC/TFC called Crossing Borders, which just concluded its first season last week. The concept of the show is empowering the Filipino, wherever in the world he finds himself. It’s a self-help show that tackles issues and concerns that Filipinos face when they are abroad – from immigration, employment, human trafficking, psychological matters, financial matters, and the list goes on.

    The objective is to provide the viewers with reliable and up-to-date information from myself and from experts that we guest on the show. Through the show, Filipinos would be able to help themselves deal with their concerns or know where to find help. And of course, my favorites is the Q&A portion, where I get to answer questions on U.S. immigration that people send in via email, text, or post on our multiply site.

    Read more

    Elderly Filipino couple battered to death in US

    An elderly Filipino couple was found dead inside their home in Rockford, Illinois, Wednesday night.

    The Winnebago county coroner’s office said 77-year-old Reynato Cardino and his 74-year-old wife Leticia died of blunt force trauma, indicating that they were battered to death.

    The couple was found dead inside their Pleasant View Avenue home in Rockford a few days after returning from their vacation in Zamboanga, Philippines.

    Read More…

    Husband seeks help for wife in ‘bonded labor’ in Oman

    Nestor Figaroa had sold his tricycle’s sidecar to add to the money that they used to buy a return plane ticket for his wife who is still in Oman.

    “Naghanap po kami ng pera. ‘Yong sidecar ko naibenta ko para lang maidagdag sa pambili ng plane ticket ng asawa ko dahil yun po ang sabi ng agency ng Oman,” Figaroa said.

    Read more…