Covering our bases

A retired US military official told Spy Bits that the United States has China to thank for Filipinos’ positive reception regarding the increased rotational presence of US troops in the country, with negotiations to finalize the framework agreement going extremely well. It’s no secret that our strategic location is crucial to the US “pivot to Asia” strategy to keep the power shift from swinging towards China. America needs to build up its presence in Asia Pacific, and Pentagon is beefing up American firepower and military capability in Saipan and other islands as backup to Guam where an initial 9,000 US Marines based in Okinawa will be relocated. The Philippines is playing a central part in the whole equation.

China’s recent “unfriendly” moves is not only driving the Philippines closer into the arms of the US, it’s also stoking the anger of many Filipinos who do not take too kindly at China disinviting President Aquino after he had already announced his trip to the Nanning expo. The Chinese reportedly gave all kinds of unreasonable demands and preconditions before PNoy could attend the expo.

The relationship between the two Asian countries is probably at its lowest and will continue to remain so as China continues to taunt us, their ships moving in and out of our maritime territory, slowly building structures – “first rocks, then a pile driver, then a foundation” as Defense Secretary Voltaire Gazmin described it – in Panatag Shoal the way they stealthily built a garrison in Mischief Reef.

China’s bully tactics hasn’t made it the most popular country in Southeast Asia. Even Singapore is suspicious, and if the city-state has the land for it, they would be happy to increase American troop presence, our source claims, citing the recent visit of US Vice President Joe Biden to Singapore ostensibly for talks on trade ties. US Navy combat ship USS Freedom is currently docked in Changi, with other US ships and Singapore Navy vessels joining the at-sea phase of Cooperation Afloat Readiness and Training (CARAT) Singapore 2013.

A Filipino businessman who would rather not be identified commented that, “To be honest about it, we really don’t mind if we allow the permanent use of the old bases in Subic and Clark,” adding that we can even open up GenSan Airport to American fighter jets. The sad part, according to the businessman is that China had so much influence already in the country because of their economic clout. Now, Filipinos are once again looking at the US, Japan and other friendly countries as their business partners. An American business executive also commented that, “life is indeed more fun in the Philippines.”

Clearly, the recent visit of US Defense Secretary Chuck Hagel is an assurance that they would give more military support to the Philippines – underscoring our country’s importance in the eyes of the US. Having just arrived from Washington on an official visit, AFP Chief Gen. Emmanuel Bautista is certainly happy that the AFP modernization program has been given a P75-billion budget. Gen. Bautista and US Joint Chiefs chairman Gen. Martin Dempsey reached an agreement for special concessions that would help the Philippines purchase more military hardware.

Thanks to the Chinese, or rather no thanks to them, our closer ties with the US will allow us to literally “cover our bases” with increased American military presence.

Unclear tax rules driving out foreign investors

A lot of foreign businessmen are not too keen about investing in the country’s real estate and property sector due to confusing and unclear tax laws. The 1987 Constitution does not allow real estate ownership by foreigners, with corporations limited to the 60/40 rule where 60 percent of a “foreign” company should be owned by Filipinos before it is allowed to own lands, buildings and condominiums.

A lot of foreign businessmen are complaining to us, saying they don’t see any reason why they should not be allowed to own real estate because the land will still remain in the Philippines regardless of who buys it. In the 1990s, Japanese corporations bought big real estate projects like the Rockefeller Center and the Pebble Beach golf course – both of which have since reverted to American ownership.

Despite the bright growth forecasts for the Philippines – which has overtaken Indonesia as the leader as far as ASEAN growth is concerned – the economy still needs foreign capital infusion to sustain the momentum. While it’s true that foreign direct investments to the country jumped up by as much as 185 percent – the total FDI of $2.8 billion is still measly compared to what other countries in the region attracted: $8.4 billion, Vietnam; $8.6 billion, Thailand; $10 billion for Malaysia; Indonesia had $19.9 billion; and Singapore, $56.7 billion.

Compared to stocks, real estate investments are long term, which is why the BIR should refrain from coming out with confusing and changing guidelines on tax rules and regulations.

Carmelo’s Wagyu Steaks

Erap Estrada pal and restaurateur Melo Santiago has put up a new venture with his daughter Cristina Santiago Rivera at the helm. Called Carmelo’s Wagyu Steaks, the new resto is supposed to offer the best wagyu steaks that literally melt in the mouth. We can tell you we’re not steak eaters but they really have excellent steaks.

 Carmelo’s is located at the upscale Greenbelt 5 in Ayala Center.

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