BIR guidelines on digital business registration

Amid a thriving digital economy in the country, the Bureau of Internal Revenue (BIR) has introduced a new regulatory measure that covers all persons engaged in business using digital platforms.

Revenue Regulations 15-2024, released on Aug. 15, 2024, stipulates that persons engaged in business, including brick-and-mortar stores and online businesses — whether selling goods, offering services, operating digital platforms, digital content creators or working as freelancers — are now mandated to register with the BIR. Failure to do so may result in administrative penalties and criminal liabilities.

The guidelines on the required place of registration of different forms of business operations are as follows:

a. Brick-and-mortar stores — in the case of its head office, at the BIR district office that has jurisdiction over the place of business address. In the case of a branch and/or facility, at the BIR district office that has jurisdiction over the place of business address or location of the branch and/or facility.

b. A person operating, maintaining or setting up an online presence or an online store for its brick-and-mortar store — shall register its store name with the BIR as an additional "business name" attached to the head office or branch managing or operating the said online store or business and shall not be registered as a branch.

c. Online businesses — for individuals, at the BIR district office that has jurisdiction over the place of residence. For juridical entities, at the BIR district office that has jurisdiction over the principal place of business registered with the Securities and Exchange Commission (SEC).

Penalties range from P1,000 for late registration to P50,000 for businesses subject to excise tax that fail to register. In more serious cases, criminal charges may be filed against those who deliberately avoid registration.

Moreover, lessors, sub-lessors of commercial establishments/buildings/space, and operators of digital platforms are responsible for ensuring their tenants and online sellers are properly registered with the BIR. Lessors and digital platforms may incur fines of P20,000 per branch or establishment for allowing unregistered sellers to operate.

Once registered, the BIR also requires businesses to display their Certificate of Registration (COR) or Electronic Certificate of Registration (eCOR) at their physical location and each branch, where it can be easily seen by the public. For businesses operating online through websites, social media or digital platforms, the eCOR must be visibly posted on their website, webpage, account, page, platform or application. The regulation emphasizes that the proof of registration should always be easily accessible to customers. Failure to display the COR or eCOR will result in a penalty of P1,000 for each violation per business or store name.

The BIR's move to require mandatory registration of online businesses is part of a broader effort to bring the rapidly growing online economy under formal regulatory oversight. The government aims to level the playing field among online and traditional businesses, all of which must adhere to the same tax obligations. By requiring businesses to display their proof of registration, the BIR wants to foster greater trust among consumers in the online marketplace.

Are you engaged in business of any kind or form? By registering with the BIR and adhering to these new rules, you not only avoid penalties but also contribute to a more transparent and trustworthy business environment. In the realm of business regulations, compliance is the best defense against costly consequences.

Source: Manila Times

16M Filipinos facing medium-to-high risk of water stress

Poor Filipinos face a higher risk of experiencing floods and dry spells, the Asian Development Bank (ADB) said.

The ADB’s latest Key Indicators for Asia and the Pacific report showed that 16.1 million Filipinos experienced medium-to-high risk of water stress or experienced frequent droughts or intense flooding.

In comparison, 2.2 million people in Thailand experience the same level of water stress.

The report compared the Philippines and Thailand to show how countries with high poverty levels experience varying climate impacts depending on its geographical location. The data were measured using the Philippines’ 16.6% poverty incidence rate in 2018 and Thailand’s 7.8% poverty incidence rate in 2017.

“Poor communities are often disproportionately affected by climate change due to their limited financial resources to adapt or recover,” ADB Statistician Arturo M. Martinez, Jr. said in a virtual briefing.

The report showed that all major parts of the Philippines faced medium-to-high risk of water stress.

The entire Metro Manila was exposed to this risk, followed by the rest of Luzon (76%), Mindanao (75%) and the Visayas (71%.) Meanwhile, all regions in Thailand experienced at least 76% of medium-to-high risk of water stress.

Geographic mapping showed that nearly two-thirds of the Philippines’ poor communities, which are spread out around the country, are exposed to medium-to-high risk of water stress.

On the other hand, less than a fifth of Thailand’s land area was home to poor communities with high water risk, mostly in the northern region.

The report also showed that 12.7 million poor Filipinos lived in areas with medium-to-high flood risk, covering 59.6% and 51% of total land area susceptible to riverline and coastal flooding, respectively.

phi-key-indicators-2024.pdf

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This compares to 400,000 poor Thai people in areas facing medium-to-high flood risk, where 33% of the land area is vulnerable to riverline flooding and 3.7% to coastal flooding.

Metro Manila and the Visayas showed 100% vulnerability to coastal and riverline flooding. In Thailand, poor people were susceptible to riverline flooding.

The data were shown using “geographically granular” data, which uses satellite-based maps and computer algorithms to help identify priority climate risk strategies.

“Granular data on vulnerability to climate change may reveal the unique environmental, economic, social, and political challenges faced by diverse places and populations. These data are crucial for targeting regions that require immediate intervention and assistance especially under budget constraints,” Mr. Martinez said.

However, 66% of statistics agencies from the Asia-Pacific reported constraints in the availability, timeliness, and granularity of climate-related data, ADB said.

The ADB noted that poorer countries have a higher level of climate risk. Low-income economies face the highest exposure to climate-related disasters but less coping capacity, while high-income economies are exposed less but have stronger coping strategies.

“Such disparities between income levels and capacity to cope are often mirrored within economies, where impoverished communities typically bear the brunt of climate risks and possess fewer resources to manage them,” according to the report.

The ADB said Asia-Pacific countries are now giving higher priority on environmental protection than economic growth.

“This preference tends to become more prevalent as an economy’s income level rises. In wealthier economies, a larger proportion of respondents favor environmental protection, even if it incurs potential economic costs,” it said.

According to the report, 56.5% of lower middle-income economies in the region said that protecting the environment is a priority even if it causes slower economic growth and some loss of jobs. This is also seen in 59.5% of upper middle-income economies and 61.8% high-income economies.

ADB Chief Economist Albert F. Park said there is a need for more partnerships to make sure vulnerable countries are ready for climate-related disasters.

“To address climate change, we’re going to have a hard time to be effective if we don’t have good data,” he told the webinar.

“I would really emphasize the need to harmonize how we define things because if everyone’s collecting data in a different way, it does become difficult to link our understanding and to learn lessons across countries.”

POOR FLOOD MANAGEMENT

The Philippine government should focus on science-based long-term solutions and risk avoidance strategies like flood forecasting to address the flooding problem, GlobalSource Partners country analysts Diwa C. Guinigundo and Wilhelmina C. Mañalac said in a brief.

In late July, massive floods caused by Typhoon Carina and enhanced southwest monsoon exposed the government’s ineffective flood management strategies over the past decade, they said.

“Careful studies show that the root of the perennial flooding problem is continuity, or specifically, the lack of it,” GlobalSource said. 

In 2013, then-Public Works Secretary Rogelio L. Singson proposed a P351-billion flood control masterplan for 11 target areas in the country. However, the plan has not even reached 30% completion a decade since its conception, the Department of Public Works and Highways (DPWH) told senators recently.

“Records show that disbursements for flood control and management projects have decreased even as the budget allocation for these projects has been constantly increasing in the last five years,” GlobalSource said, citing Senate findings.

Citing a Senate press release, GlobalSource said 20% of the DPWH budget between 2020 to 2023 was allocated to flood management. This was increased to 25% in the 2024 budget.

However, the DPWH disbursed only 68.26% of its budget in 2021, 73% in 2022, and 58% in 2023, it said.

adb report 2024.pdf

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Source: Business World

The popularity of leisure-oriented developments

The pandemic has highlighted the need for greener, more open spaces. This is a major reason why property firms now offer bigger spaces, whether for condominium or horizontal developments. These projects are classified as upscale and luxury developments based on total contract prices but are among the best-selling projects in the market post-COVID. We expect developers to continue launching similar projects, but the first movers definitely have an advantage.

Colliers Philippines believes that it is imperative for property firms to take advantage of the rising demand for resort-themed projects across the country. For one, these projects are banking on the revival of the Philippine tourism market, which the Marcos administration continues to aggressively promote. The tourism sector remains one of the major job-generating economic sectors of the Philippines, and the government’s emphasis on the sector will substantially benefit developers catering to local and foreign markets.

Leisure-themed developments also benefit from improving connectivity. Major projects in the Cavite-Laguna-Batangas (Calaba) corridor, for instance, are taking advantage of improving access from Metro Manila to Southern Luzon. Hordes of people visit their favorite destinations in the south during weekends and holidays, and the ease of travel has been facilitated by the completion of major public projects, including those connecting cities from north to south Luzon.

IMPROVING CONNECTIVITY AND LEISURE-ORIENTED PROJECTS

The leisure sector stands to benefit from the new and upcoming infrastructure projects. From the modernization and expansion of airports to the upgrading of roads, particularly those that lead to new and exciting tourism spots, Colliers believes that these joint infrastructure implementation efforts between the government and private sector players should help the government accommodate more international tourists and entice long-haul and high-spending ones, especially now that the Philippines intends to attract 7.7 million foreign visitors this year and 12 million in 2028.

The foreign visitors should eventually be enticed to invest in the country, adding a layer of demand to the already strong upscale and luxury markets.

RISING DEMAND POST-COVID

Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. These projects were already popular pre-COVID, but the pandemic only highlighted the need for these leisure-themed residential enclaves. Among the developers with leisure-centric properties outside Metro Manila are Brittany Corp., DMCI Homes, Inc., Rockwell Land, Inc., Megaworld Corp., Ayala Land, Inc., Robinsons Land Corp., Cebu Landmasters, Inc., Torre Lorenzo Development Corp., AboitizLand, Inc., Costa del Hamilo, Inc., Landco, Inc., and Damosa Land, Inc., with projects located in Cebu, Davao, Bohol, Palawan, Cavite, and Batangas. These projects remain popular, and Colliers encourages developers to further assess launching similar projects.

COLLIERS SURVEY RESULTS POINT TO THRIVING POPULARITY

A recent Colliers webinar poll showed that Palawan was the most preferred destination of our respondents (45%), followed by Boracay (17%) and Cebu (16%). Both Palawan and Boracay have been awarded as the third and fourth best islands to travel to, according to the Travel + Leisure Luxury Awards Asia Pacific 2024.

Colliers believes that hotel operators should remain active in capturing demand from domestic tourists who are enticed by impulse travel, as well as foreign visitors. Property firms should explore building either hotels or leisure-centric residential enclaves in popular destinations across the Philippines. Among the developers with leisure presence in Palawan are Brittany Corp., Megaworld Corp., Ayala Land, and Sta. Lucia Land.

Meanwhile, among the developers with resort-themed developments in Boracay, Cebu, and Davao are Brittany Corp., Robinsons Land Corp., Rockwell Land, Torre Lorenzo Development Corp., AppleOne Properties, Inc., Ayala Land, Damosa Land, Inc., and Cebu Landmasters.

Colliers believes that the leisure sector will also likely benefit from the new and upcoming public infrastructure projects of the government. The modernization and expansion of airports such as Panglao, Laguindingan, Zamboanga, Ninoy Aquino International Airport (NAIA), and the New Manila International Airport, as well as the development of new roads to emerging tourist destinations, will likely entice more long-haul and high-spending tourists. This should also support the Department of Tourism’s goal of attaining 7.7 million foreign arrivals in 2024 and 12 million in 2028.

Results of our Q2 2024 Residential Survey showed that about 28% of our respondents chose beachfront properties as their next residential investment. Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. In our view, these projects will likely remain popular, especially among investors looking for greener and more open spaces. Colliers data showed that these projects have take-up rates of between 40% and 100%, with average prices per square meter ranging from P214,000 to as much as P590,000 ($3,800 to $10,500) as of end-2023.

Among the developers offering resort-themed developments are Brittany Corp., Ayala Land, Rockwell Land, Robinsons Land, Torre Lorenzo Development Corp., Sta. Lucia Land, and DMCI Homes, dispersed across Batangas, Cavite, and Cebu. In our view, the recovery of the country’s travel and tourism sector will also likely lift the demand for these projects.

PHL HOSPITALITY AND FOSTERING INCLUSIVE GROWTH

Colliers believes that public-private partnerships should not just focus on infrastructure development. Greater emphasis should also be provided in propping up the tourism sector and in making sure that it benefits all stakeholders — from hotel owners and operators to retailers of souvenir items. Over the past few years, we have seen the expansion and modernization of airports in Clark and Cebu, and there will be more in the pipeline — New Manila International Airport in Bulacan and the rehabilitation and expansion of the existing NAIA. With tourism as one of the major job-generating sectors of the Philippine economy, there’s so much on the line. That’s why greater public and private participation is needed in buoying the sector, ensuring that public projects are completed as scheduled, and promoting sustainable and inclusive economic growth across the Philippines.

Further growth of Philippine tourism is a win-win for developers and property investors.

Source: Business World