A measly 3% interest for P1B

Seaweed king Benson Dakay maintains a yacht called the Southern Cross – the older Queen Mary, named after his mom, sank during a typhoon – for business reasons.

You see, Mr. Dakay uses the yacht to bring Shemberg’s foreign seaweed buyers for some diving R&R in Palawan.

One of the first things a foreign buyer sees when he visits the Shemberg head office is his/her national flag waving in the Cebu sky.

As everybody knows, Shemberg is the country’s top exporter of seaweeds, followed by Marcel Trading, which is owned by the family of Li Peng Wee of Zamboanga.

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Government Service Insurance System president and general manager Winston Garcia is bent on issuing smart cash cards to all 1.4 million members of the pension fund within the next 12 months.

Currently bidding for the cash card, which will also act as an identification card since it will carry the member’s photo – are Bank of the Philippine Islands and the Development Bank of the Philippines.

No, Land Bank of the Philippines is not bidding for the project. You see, LandBank president Margarito Teves is still sore the GSIS has withdrawn P9 billion and kept a maintaining balance of only P1 billion, earning an unchanged interest rate of a measly three percent.

With the cash card, GSIS members will be able to encash the proceeds of their loan within second by ATM. Right now, GSIS issues crossed checks (to reduce fraud), which has the usual three-day clearing time in Metro Manila and much longer in the provinces.

Estimated cost per card is P35.

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There’s talk that Finance Secretary Juanita Amatong has okayed a campaign to derail the implementation of the 2002 Barangay Micro Business Enterprise Law by Trade Secretary Cesar Purisima.

The DoF campaign encourages city and municipal treasurers not to issue the certification necessary for a micro-enterprise to avail of a two-year income tax exemption. There are, of course, a few hold-outs like Quezon City, which under Mayor Feliciano Belmonte, now has the most number of registered BMBEs nationwide.

Here’s the DoF logic. Exempting BMBEs would cost the government P4 billion in foregone income taxes, which would obviously affect government’s annual budgetary allocation or what is normally called IRA, which is short for internal revenue allotment – to all local government units.

Now, here’s the logic of DTI. The tax exemption covers only income derived from the operation of the business. This means that while IRA might indeed go down during the two years that the BMBE is exempted from income taxes, LGUs will still be able to collect from each BMBE other taxes such as real estate as well as from the annual mayor’s permit. Because they are given this tax break, these micro-enterprises will be able to hire more people, who would, at the very least, spend their money on goods and services and, at best, pay their individual income taxes.