Duterte pushes lower tax rates, free WiFi

MANILA – President Rodrigo Duterte on Monday gave a rundown of his reform agenda which includes lowering taxes, solving traffic jams, and relaxing bank secrecy rules as he vowed economic growth that is felt by the poor.

In his first State of the Nation Address, Duterte said he hoped to leave an economy that is “much stronger” by the end of his six-year term in 2022.

“My administration will continue and maintain current macroeconomic policies and even do better,” he told lawmakers, top government officials and diplomats.

“We will achieve this through prudent fiscal and monetary policies that can help translate high growth into more and better job creation and poverty reduction,” he said.

A strong economy, Duterte said, is characterized by “solid growth, low and stable inflation, dollar reserves and robust fiscal position.”

TAXES, BANK SECRECY

Duterte said he would lower personal and corporate income taxes and shift to a “simpler, more equitable” tax system.

He did not elaborate, but his economic managers have said income tax rates could be lowered to 25 percent from as high as 32 percent.

“At the household level, there must be sufficient income for all Filipinos,” he said.

Duterte also said he would “relax” the bank secrecy law.

Last February, hackers shifted $81 million from Bangladesh’s foreign reserves to the Rizal Commercial Banking Corp. and then laundered in casinos, taking advantage of loopholes in the country’s banking and anti-money laundering laws.

TRANSPORT WOES

Duterte asked lawmakers for “emergency powers” to untangle crippling traffic jams in Metro Manila and listed down his plans to improve commuting in the capital city of 12 million people.

 "If you give it [emergency powers], fine; if not, we take the longer route, slowly, and tanggapin ko ‘yung pagmumura ninyo," he said.

The country loses P2.4 billion daily due to the traffic problem.

Additional powers may include doing away with public bidding for some projects and opening private subdivisions to traffic, according to his economic team.

Duterte said the transportation department would increase the number of trains on the Metro Rail Transit to 20 from the current 16 and increase train speeds to 60 kph from 40 kph.

Operating hours at the Light Rail Transit will be extended by an hour at night to 10:30 p.m. from 9:30 p.m.

The Pasig River ferry as an alternative mode of transport will be revived, he said.

General aviation will be transferred to Sangley Point to help decongest the main airport in Manila, and a railway will be constructed from the capital to Clark International Airport, an alternative gateway.

INTERNET, RED TAPE

Duterte ordered the drafting of a plan to install a national broadband infrastructure and said free wireless internet would be made available in public places.

He said he would reduce the processing time for issuing business permits and licenses "to the barest minimum," as he reiterated his order to crack down on red tape.

"In my city, it is always three days for local governments, that will bind the Office of the President down to barangay level," said the former Davao City mayor.

Motor vehicle plates should also be issued at the point of sale to prevent backlogs at the Land Transportation Office, he said.

source: www.abs-cbnnews.com

Faulty printer implicated in $81-M bank heist

DHAKA, Bangladesh - A printer fault at Bangladesh's central bank meant that overseas queries about suspicious transactions went unanswered, according to a report seen by AFP Wednesday on the $81 million cyber heist that sent shockwaves through the banking world.

The report, filed to police on Tuesday, recounts the events leading to the discovery of the dramatic theft from an overseas account of Bangladesh Bank.

It says that because of a printer and software problem, it took the Bangladesh central bank nearly four days to ask banks across the globe to halt payments to the hackers.

They tried to steal around $1 billion and got away with $81 million from the impoverished country's coffers.

How a hacker's typo helped stop a billion dollar bank heist

Central bank governor Atiur Rahman and two of the deputy governors have lost their jobs over the scandal, which has hugely embarrassed the government and raised alarm over the security of the country's foreign exchange reserves of over $27 billion.

On Wednesday the government, which has said it was kept in the dark about the losses for weeks, also removed its most senior banking official M. Aslam Alam from his position.

The hackers managed to transfer $81 million on February 5 -- a Friday, when Bangladesh Bank is closed -- from its account with the Federal Reserve Bank of New York, transferring the cash electronically to accounts in the Philippines.

In the report seen by AFP, the bank's joint director Zubair bin Huda said engineers were unable to fix the printers until February 6, a day after the New York bank sent queries about four separate transactions.

"Since such glitches happened before, we thought it was a common problem just like any other day," Huda said in the report.

Bangladesh Bank tried to contact New York on February 6 by email, fax and phone to ask that the transactions be suspended when it realized that the SWIFT interbank messaging system which it normally used was not working properly, Huda said.

"We realized that the SWIFT system being ineffective was an important issue, and therefore we sent an email to Federal Reserve Bank of New York at 1:30pm on February 6 to halt all types of payment processing," he said.

But they were unable to get through as the US bank was closed for the weekend.

It was not until Monday afternoon that the central bank's main server was again working properly and officials were able to send the formal requests to stop the payments to six banks across the globe.

But by that time $81 million had been transferred from Bangladesh Bank's New York account to a bank in the Philippines.

PHILIPPINES ACCOUNT

The money was later transferred to an account belonging to ethnic Chinese businessman William So Go, a Philippine Senate committee heard this week.

The money was then transferred to Philippine casinos, Julia Bacay-Abad from the Philippines' anti-money laundering council told the hearing on Tuesday.

Go's lawyer said the businessman's signatures for his now-frozen RCBC account, which were used to transfer the money, had been forged.

'Money trail in laundering scam ends with casinos'

Casino junket operator got $30-M in cash

Another transfer of $20 million was halted by a bank in Sri Lanka at Bangladesh Bank's request.

As details of the scandal emerged last week, Bangladesh Finance Minister A.M.A. Muhith threatened to sue the New York Fed.

The US-based bank said in a statement on its website that the payment instructions "were fully authenticated by the SWIFT messaging system in accordance with standard authentication protocols".

LACK OF TRANSPARENCY

Meanwhile, the $81 million heist has also put a spotlight on the Philippines' strict bank secrecy law. Finance Secretary Cesar Purisima earlier said the Philippines along with Lebanon are some of the only countries in the world left with a bank secrecy law.

Even Switzeland, which is known for its strict banking system, has been open to relax the law.

PH one of few countries with bank secrecy law

According to a law enacted in 1955, all bank deposits in the Philippines are absolutely confidential and may not be examined "except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation."

Last year, Internal Revenue Commissioner Kim Henares said the government is preparing a draft bill that would lift or ease the bank secrecy law to strengthen government's tax collection efforts. Congress, however, thumbed it down.

Makati Business Club chairman Ramon del Rosario said he found it "uncomfortable" that the bank secrecy law was invoked during the Senate investigation on the $81 million heist.

Senator Sergio Osmena III said the international financial community has already taken notice of loopholes in Philippine laws.

"As far as I am concerned, sunlight is the best medicine. Transparency in a democratic setting is the best safeguard against corruption and against bad public officials," he said.

“Despite all the warnings from the FATF (Financial Action Task Force), we still don’t have the political will to plug those loopholes. I hope that this will teach us a lesson because the international financial community has just taken notice of how big our loopholes are and it’s become an international incident because [81 million] dollars was hacked from the account of Bangladesh Central Bank and laundered through the Philippine financial system." With Agence France-Presse

Osmena: Political will needed to plug laundering loopholes

source: www.abs-cbnnews.com