AMMAN, Jordan – Royal Jordanian Airlines said on Sunday, July 9, it has won an exemption from a US ban on passengers carrying laptops and tablet computers on flights from its hub in Amman.

The announcement comes more than 3 months after the United States prohibited such devices on flights from 10 airports in 8 countries in the Middle East and North Africa as well as Turkey.

"Enhanced security measures are now implemented to meet the requirements of the US Department of Homeland Security’s new security guidelines for all US-bound flights," Royal Jordanian chief executive Stefan Pichler said in a statement.

"We are glad that our guests can now fly onboard RJ and use their electronic devices," from Amman's Queen Alia International Airport, he added.

Jordan's national carrier now joins Etihad, Emirates, Turkish Airlines, and Qatar Airways in being exempted from the ban.

The measure also targeted flights originating in Egypt, Morocco, and Saudi Arabia.

Saudi Arabia's flagship airline, Saudia, said it expects the United States to lift the ban on its flights on or before July 19.

The United States has said it will abolish the ban for airlines that implement new safety measures. – Rappler.com

KUWAIT CITY, Kuwait – Kuwait Airways said Sunday, July 10, that a ban on laptops and tablets in the cabins of its US-bound flights had been lifted by Washington.

"Now our passengers flying from Kuwait International Airport to #JFK in #NY will be able to use all of their personal electronic devices," the emirate's flag carrier said on Twitter.

{source}

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Now our passengers flying from Kuwait International Airport to <a href="https://twitter.com/hashtag/JFK?src=hash">#JFK</a> in <a href="https://twitter.com/hashtag/NY?src=hash">#NY</a> will be able to use all of their personal electronic devices. <a href="https://t.co/qXWd9gHS8d">pic.twitter.com/qXWd9gHS8d</a></p>&mdash; Kuwait Airways (@KuwaitAirways) <a href="https://twitter.com/KuwaitAirways/status/884080142913593344">July 9, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

{/source}

The United States in March barred all electronic devices larger than a mobile phone in the cabins of direct flights to the US from 10 airports in Turkey, the Middle East and North Africa, only allowing them in hold luggage.

The ban was brought in after intelligence officials learned of efforts by jihadists from the Islamic State group to produce a bomb that could be hidden inside such devices.

For the same reason, Britain also banned similar-sized electronics from the cabins of direct flights from 6 countries.

Etihad Airways on Sunday became the first airline to benefit from the lifting of the ban, with flights from the airline's base in the Emirati capital Abu Dhabi no longer affected.

Dubai-based Emirates, Turkish Airways, Qatar Airways and Saudi Arabia's national airline have all said their passengers are now allowed to bring personal electronics on board direct flights to the US. – Rappler.com

Is there a way to pay taxes without being compromised? Even if we pay the right taxes, we end up paying more every time the Bureau of Internal Revenue (BIR) audits us.

Yes. There is definitely a way to pay taxes without penalties and compromises.

You have to make sure to pay the right taxes correctly and on time. If you do exactly that, even if the BIR audits your company, the examiners will not find any deficiency or assessment.

However, even if you think you pay the right taxes but you fail to comply with tax regulations including submission of supporting documents such as the summary list of sales and purchases (SLSP), alphalist, etc, the BIR will still impose compromise penalties.

Can you tell us more about the Seal of Honesty (SOH) Certification Program? What is CSR Philippines? If it will keep the BIR examiners away from our business, I will subscribe to it.

Seal of Honesty (SOH) is a certification program spearheaded by CSR Philippines in partnership with the BIR and Department of Trade and Industry (DTI) to promote a culture of honesty and integrity in paying taxes. SOH supports and complements the Integrity Pledge of the Integrity Initiative (II), signed by professionals and corporations for ethical and corporate good governance.

The Center for Strategic Reforms of the Philippines Incorporated or CSR Philippines is a non-stock, non-profit, and non-governmental organization which aims to assist micro, small, and medium enterprises (MSMEs) in finding solutions to concerns such as but not limited to financial support, low productivity and competitiveness, limited management and financial capabilities, as well as the lack of access to new technology. Through public-private collaborations, CSR seeks to promote MSME development and genuine tax reform toward inclusive growth.

CSR Philippines signed a memorandum of understanding (MOU) with the BIR and DTI on August 23, 2016. This MOU states that:

I. They shall work cooperatively in spreading tax awareness among taxpayers, where CSR Philippines can serve as think tank of the DTI and BIR on ease of doing business and in paying taxes in order to broaden the taxpayer base;

II. They shall collaborate as advocacy partners in simplifying and integrating business registration and procedures for MSMEs in order to encourage more potential entrepreneurs to do business in the country, which will significantly contribute to achieving inclusive growth;

III. They shall aim to improve voluntary compliance through empowerment and tax awareness as well as through the SOH Certification Program where businesses, most especially the medium and large enterprises, which will commit to promoting a culture of honesty and integrity in paying taxes, will be awarded and recognized for their honest and fair contributions;

IV. They shall recognize MSMEs as a major contributing force to our country's investment and economic growth, job creation, taxation, productivity enhancement, and technological innovation by assisting instead of assessing them in their government compliance.

To know more about the SOH Certification Program, you may email info@sealofhonesty.ph or call (02) 3725727. Its official website will soon be available for online subscription: www.sealofhonesty.ph. – Rappler.com

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2016 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth. Follow Mon on Twitter (@askthetaxwhiz) or visit his Facebook page. You may also email him at consult@acg.ph.

MANILA, Philippines – Federal Land Incorporated partnered with two of Japan's top firms for a P20-billion retail and residential complex soon to rise in Bonifacio Global City, Taguig.

The George Ty-led company said in a statement that it teamed up with residential leader Nomura Real Estate Development Company Limited and retail service group Isetan Mitsukoshi Holdings Limited to develop the Sunshine Fort Landmark project, which is expected to be completed in 2025. 

"Today is a momentous occasion as we officially welcome Nomura Real Estate Development and Isetan Mitsukoshi Holdings to the GT Capital family," said Alfred Ty, chairman of Federal Land.

The 3 companies will jointly finance and develop the P20-billion Sunshine Fort Landmark project, which is part of Federal Land's 10-hectare Grand Central Park development in Bonifacio Global City. A provision in the 1987 Constitution limits foreign ownership of companies in the Philippines to 40%.

Federal Land said the mixed-use development will bring the Japanese tradition of excellence, innovation, and artistry to the Philippines. (READ: Fitch affirms PH investment grade rating at BBB-)

Entry into PH market

Nomura Real Estate president Seiichi Miyajima said the company's venture into the Philippine market is a result of the deep ties between Tokyo and Manila.

"This project is memorable to us since this is the first time that we will integrate Japanese concepts of project planning, technology, and knowledge to the Philippine market. We are strongly prepared to pursue business in the Philippines as it has shown to have the strongest growth in Southeast Asia,” Miyajima said.  

Meanwhile, Isetan Mitsukoshi senior advisor Kunio Ishizuka said his firm will try its best to "excite and move every customer in the Philippines by helping Federal Land enhance the Filipino lifestyle through introducing Japanese style and quality." 

The Philippines is Isetan Mitsukoshi's 4th overseas business in Southeast Asia, and will be its first challenge in complex real estate development.

GT Capital Holdings Incorporated, the parent firm of Federal Land, is a listed Philippine conglomerate that has businesses in banking, property development, infrastructure and utilities, automotive assembly, and importation, among others. – Rappler.com

MANILA, Philippines – Foreign direct investments (FDIs) hit net inflows of nearly $900 million in April 2017, but were still down 61.1% compared to the same month in 2016, according to the Bangko Sentral ng Pilipinas (BSP).

Data released by the BSP on Monday, July 10, showed that FDI net inflows last April totaled $874 million, compared to the $2.24 billion in April 2016.

The drop was due mainly to net equity capital investments, which amounted to $70 million in April 2017 from $825 million in April 2016.

Gross equity capital placements of $84 million, compared to withdrawals of $14 million, were channeled mainly to real estate, financial and insurance, electricity, gas, steam, and air conditioning supply, manufacturing, and health and social work activities.

The bulk of these equity capital placements during the period came largely from the United States, Japan, Singapore, France, and Hong Kong.

Investments in debt instruments or intercompany borrowing between parent firms and their subsidiaries in the Philippines also declined to $723 million in April 2017 from the $1.3 billion in April 2016.

Reinvestment of earnings, meanwhile, increased by 9.3% to $81 million.

FDIs down so far this year

For comparison, the $2.24 billion in April 2016 alone almost equals the total FDI inflows in the first 4 months of 2017.

For January to April this year, preliminary net inflows totaled $2.4 billion, down 32% compared to the $3.6 billion posted in the same period a year ago.

This, the BSP noted, was due to net equity capital investments falling sharply to $170 million in January to April 2017, from $1.4 billion in January to April 2016.

Equity capital placements during the period were sourced mainly from Japan, the US, Singapore, Hong Kong, and Germany. These were invested mainly in real estate, financial and insurance, wholesale and retail trade, manufacturing, and utilities.

Meanwhile, net investments in debt instruments grew moderately by 2% to hit $2 billion. Reinvestment of earnings reached $274 million, up 7.5% compared to the $255 million last year. – Rappler.com

MANILA, Philippines – For the 15th year, the Japan International Cooperation Agency (JICA) again granted the Philippines ¥264 million (P117.55 million) in aid for human resource development of Filipino government employees.

"What we tend to forget is that human capital development, also called human infrastructure, is critical to development; and yet it is far less expensive so we should invest more in human capital than what we have been doing," Socioeconomic Planning Secretary Ernesto Pernia told reporters on the sidelines of a ceremonial signing in Pasig City on Monday, July 10.

The National Economic and Development Authority (NEDA), led by Pernia, represented the Philippine government during the signing.

Under the grant aid, 20 Filipinos working in government agencies will take post-graduate courses in Japan's leading universities such as the International University of Japan, Kobe University, Meiji University, International Christian University, and Nagoya University.

The Filipino scholars will take studies relevant to the socioeconomic agenda of the Philippines as well as attend lectures and leadership trainings on Japan's development experience and emerging development issues.

Among the courses the chosen scholars will take are infrastructure and industry development, public policy, financial reforms, as well as promotion of small and medium enterprises. (READ: PH's longest railway to get funding from Japan, possibly China)

For JICA chief representative to the Philippines Susumo Ito, the partnership signifies Japan's continuous commitment to support the Philippines.

"We value our relationship with the Philippines and fully support the government's efforts to build the capacity of its people, particularly Filipino professionals working in government," Ito said during the ceremony.

The Philippines has been one of the top recipients of Japan's scholarship project. Others include China, Myanmar, Vietnam, Cambodia, and Laos.

Since 2002, 259 Filipinos have received the Japanese scholarship.

Investing in human capital development is part of the 10-point socioeconomic agenda of President Rodrigo Duterte's administration. – Rappler.com

P1 = ¥2.245

MANILA, Philippines – Busan Universal Rail Incorporated, the maintenance provider of the Metro Rail Transit Line 3 (MRT3), dismissed allegations that the railway system encountered more glitches under its watch. 

Busan lawyer and spokesperson Charles Mercado said the latest Commission on Audit (COA) report on MRT3 operations included glitches from January 2014 to December 2016.

"Busan only took over the maintenance operations of MRT3 last January 2016. This is such a short time to show any improvements," Mercado said during a briefing in Makati City on Tuesday, July 11.

As of June 30, Mercado said Busan has recorded a comparative decrease of about 17% in train stoppages compared to 2016, and about 20% from the 2015 level. (READ: DOTr eyes MRT3 buyout under Duterte admin)

"There are some discrepancies in the way the latest COA finding on our performance was reported in the media," Mercado said, asserting Busan has delivered its contractual obligations and even outperformed some requirements.

Mercado said that when Busan assumed maintenance operations in January 2016, only 40 of the 72 MRT3 cars were operational. "The 40 cars at that time added to only 13 usable 3-car trains, with one extra car."

"However, from January 2016 when Busan started work on its contract with the government, it progressively restored 26 of the non-operational cars to make available up to 22 3-car trains by end of the year," Mercado said.

In 2015 under SBI-CB&T, the service provider before Busan, Mercado said there were a total of 2,776 system glitches and an average of only 61.44% operational cars.

In contrast, during the first year of work, Busan claimed it was able to reduce the number of system glitches to 2,701, even as it increased the average number of operational cars to 71.69% of the total fleet.

"It is unfair to continuously put the blame on us for every incidence of train stoppage that is generally and more often caused by the system's rail condition and increasingly evident design flaws," Mercado said.

Largely unpaid

Mercado also disclosed during the press briefing that the government has only partially paid Busan for its September 2016 to December 2016 work and largely unpaid Busan for its rendered service since then. 

"This is for pending billing of more than P200 million," the contractor's legal counsel said.

But despite the underpayment, Mercado said Busan is moving forward to meet its commitment of train reliability, as well as safety and comfort for ridership.

He said Busan has employed 500 dedicated personnel, of which some 40 are in the front office and about 450 assigned day-in and day-out at the MRT depot. 

"These locals work hand in hand with the South Korean engineers from Busan Transport Corporation to directly perform duties that ensure train availability and safety of passengers," Mercado said.

As of July 10, the operational fleet availability of the MRT3 is at 91.67% or 66 out of 72 cars.

Busan is a joint venture of South Korea's Busan Transport Corporation, Tramat Mercantile Incorporated, TMI Corporation, Castan Construction Corporation, and Edison Development & Construction. – Rappler.com

MANILA, Philippines – Chelsea Logistics Corporation, another company of Davao-based businessman Dennis Uy, got approval from the Securities and Exchange Commission (SEC) to embark on its P8-billion stock market debut expected this month.

Pending the go signal from the Philippine Stock Exchange (PSE), Uy's logistics firm can finally push through with its planned initial public offering (IPO), which involves 546.593 million new common shares at a maximum price of P14.63 each.

"This is a great day for us. Thank you. I hope we can get the support of the investors," Uy told reporters in Makati City on Tuesday, July 11.

This development comes the same day as the 10th listing anniversary of Chelsea's sister company Phoenix Petroleum Philippines Incorporated, an event graced by President Rodrigo Duterte– a first in the history of the local bourse. Uy was one of the major campaign contributors of Duterte.

Chelsea will be the 2nd company under Udenna Corporation, Uy's holding company, to go public. Phoenix Petroleum Philippines made its stock market debut back in 2007.

Chelsea's IPO paves the way for the company to join the Main Board of the PSE under the ticker symbol "CLC" and subsequently allow the investing public to trade 30% of its 1,821,977,695 outstanding shares after the offer.

The shipping company expects to net P7.59 billion from the IPO. The fresh capital is largely earmarked for the expansion of the company's cargo and passenger shipping businesses organically as well as through acquisitions.

The company plans to run the IPO from July 21 to July 27 and debut on the local bourse by the end of the month, subject to PSE approval.

Udenna ventured into the logistics sector as early as 2006 through Chelsea Shipping Corporation to support the operations of Phoenix Petroleum, formerly the Davao Oil Terminal and Services Corporation.

Udenna's shipping business has since grown into the country's largest shipping group operating throughout the Philippines and Southeast Asia. It has the largest tanker fleet in terms of capacity with a total 39,271.64 gross registered tonnage.

Aside from advancing its expansion plans, Udenna is poised to further expand its footprint in the logistics sector with the planned consolidation of its stake in 2GO Group Incorporated with its other shipping businesses under Chelsea.

Udenna indirectly has 21% voting and 28% beneficial interests in 2GO. (READ: 2GO appoints new CFO, reports lower 2015, 2016 profits)

2GO's financial performance for 2015, 2016, and the 1st quarter of 2017 shrunk, after the new management of the logistics provider asked SGV and Company to conduct a special audit.

After the special audit, 2GO reported a restatement of its financial performance for 2015 and 2016, as well as the unaudited financial statements for the 1st quarter of 2017. (READ: How SM Investments acquired stake in 2GO)

2GO clarified that its net income in 2015 was only P109.131 million. This is a 90% slide from the P1.08-billion profit 2GO earlier announced in its 2015 annual report.

For 2016, 2GO said in the disclosure that its restated net income is P344.035 million, 74% lower than what was stated in its 2016 annual report.

The SEC is set to summon current and former 2GO management and auditing firms for its probe into the "overinflated figures." – Rappler.com

MANILA, Philippines – In front of his friend President Rodrigo Duterte, Davao-based businessman Dennis Uy promised a P100-million mutual fund for Filipino soldiers and policemen.

The mutual fund dubbed "LIFE" is "envisioned to offer continuous financial security to soldiers and policemen as well as their families through sound investment practices and guidance programs."

Uy's offer of assistance comes as the death toll from the clashes in Marawi City breached the 500-mark, with 89 of the fatalities soldiers and policemen.

The businessman said more details of the mutual fund would later be released.

"It is fun to help the troops battling in Marawi. During these times, they need our support. The soldiers help protect our democracy. Hopefully, the private sector can support them also," Uy told reporters on the sidelines of Phoenix Petroleum Philippines Incorporated's 10th listing anniversary in Makati City on Tuesday, July 11.

It was the first time in recent Philippine Stock Exchange (PSE) history that a Philippine president graced a listing anniversary event. Uy was one of the major campaign contributors of Duterte in 2016.

Phoenix Petroleum is the first company from Davao City to join the PSE and the first independent oil company to go public after the passage of the Oil Deregulation Law in 2008.

Since its stock market debut in 2008, Phoenix Petroleum has been able to expand its retail network outside Mindanao and build the largest storage capacity among independent oil firms.

From its first 5 stations in Mindanao in 2005, Phoenix Petroleum now has more than 500 stations nationwide.

Shopping for deals

Since then, the company has moved to buy the liquefied petroleum gas business of Petronas Dagangan Berhad in the Philippines.

Phoenix Petroleum's board of directors last week approved the acquisition of Petronas Energy Philippines Incorporated (PEPI) and Duta Incorporated for $126.1 million (P6.40 billion).

Phoenix also opened its 9th oil terminal in Consolacion, Cebu to serve the growing demand of the shipping, transportation, and construction industries in the Visayas, among others.

For the next 3 years, Phoenix Petroleum chief finance officer Joseph John Ong said his company has allocated P8 billion for potential mergers and acquisitions.

"We have also earmarked P2 billion for organic growth, meaning build more stations, build more depots, and capacities," Ong told reporters on the sidelines of the listing anniversary.

He added that they are open to acquiring more companies in the oil and gas sector, but nothing has been firmed up yet.– Rappler.com

MANILA, Philippines – If a probe uncovers irregularities in the financial statements of 2GO Group Incorporated, the publicly-listed company's management and auditors may face a fine of more than P1 million, among others, according to the chief of the Securities and Exchange Commission (SEC).

"It will not be less than P1 million. And then there is probably a daily fine of P10,000 at least since the time it was discovered and your attention has been called that there has been really wrong accounting. So the penalties will run from that time," SEC Chairperson Teresita Herbosa said on the sidelines of an event in Makati City on Tuesday, July 11.

2GO last week restated its 2015 and 2016 financial statements, after a special audit requested by the firm's new management – a development that is turning out to be a major accounting scandal.

The restated financials pruned a whopping 90% off 2GO's net income in 2015 to P109.131 million. It also turned out that its 2016 net income should have been 74% lower than what was reported.

The special audit conducted by SGV and Company also showed that in the 1st quarter of 2017, there was a net loss of P264.86 million, instead of the earlier reported net income of P267.562 million.

Herbosa said she has never encountered such a big discrepancy. "We are going to prioritize this because of the reports regarding the overinflated figures. If proven that the reported misrepresentation is really that big, that calls for a really big investigation."

Following the accounting fiasco is the resignation of 2GO chief financial officer Jeremias Cruzabra, who was replaced by William Charles Howell.

The restated financial statements came after SM Investments Corporation acquired a 34.5% stake in 2GO's parent company for $124.50 million. It was also last March when Chelsea Logistics Corporation acquired a significant interest in 2GO. (READ: How SM Investments acquired stake in 2GO)

Chelsea Logistics still optimistic

Despite the fiasco, Chelsea maintains its optimism over the 2GO Group's prospects, anchored on strong fundamentals and potential synergies between Udenna Corporation and the SM Group.

Chelsea chairman Dennis Uy – who concurrently serves as the president and chief executive officer of 2GO Group – had approved the restatement of the financial statements of 2GO for the prior periods.

"The restated financials were subsequently disclosed for fairness and transparency to the shareholders and the investing public. The restatement also reflects the commitment of the new management and board to raise corporate governance standards in the company," Uy said.

He added that the restated items are non-cash and non-recurring. "Thus, the prospective profitability of 2GO remains strong."

The new management of 2GO took over only in the 2nd quarter of 2017.

KPMG was the former auditor of the 2GO Group. RG Manabat and Company, the local partner of accounting firm KPMG, said in a statement that it is confident its audit was "in compliance with the Philippine Standards on Auditing."

"Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements," RG Manabat and Company said.

"The firm has requested, but has yet to receive, from 2GO Group the details on the restatement of its 2015 and 2016 financial statements," the accounting firm added.

If proven that there was misrepresentation in the audit, Herbosa said the SEC may impose penalties and/or revoke the license of KPMG.

"Following our authority to accredit auditors when they do audit for publicly listed companies, we will have to look at whether we have to revoke and impose penalties on them," she said. – Rappler.com

MANILA, Philippines – Global website hosting and cloud platform firm GoDaddy has launched a new website builder as it throws its hat into the growing ring of global firms targeting the Philippines' thriving micro, small, and medium enterprises (MSMEs).

"In the Philippines, there are almost a million small businesses registered with the government. At present only about 40% of people have a web presence," noted GoDaddy chief executive officer Blake Irving in a media briefing on Tuesday, July 11.

"Beyond that million, there also happens to be a lot of folks with a full-time job who are starting their entrepreneurial careers as a side job. Some estimates put that at up to 50 million. Most of our customers start that way," he added.

The US-listed GoDaddy entered the Philippine market in February 2016 and has since seen 25% customer growth, according to Irving, who put the number of Philippine customers in the "hundreds of thousands."

To capitalize on this growth, the firm has launched its new website builder in the Philippines. This combines mobile-optimized website capability with an integrated set of online marketing and e-commerce tools to get small businesses and entrepreneurs online.

The website builder also includes access to curated email marketing campaigns set up as part of the service.

GoDaddy currently has around 71 million website domains under its management, which accounts for 21% of the global total.

The firm said websites created using its platform are all designed to be fully mobile-responsive, with an emphasis placed on instant visual impact on phones and tablets. This is key as the Philippines has an 88% mobile phone adoption rate, according to Google's 2016 Connected Consumer Survey.

Other features include the ability to do mobile editing, real-time analytics, and social media integration. The service is available on GoDaddy's Philippine website and starts at P719 a month after a month-long free trial.

GoDaddy also runs a call center in the country with 300 employees who are responsible for its global customer service care. Irving said "doubling that number in the next couple of years is reasonable."

"When you have 25% customer growth, you pour more investment in the 25%," he added. – Rappler.com

MANILA, Philippines – The Senate of the Philippines Committee on Ways and Means holds a hearing on the Tax Reform Bill on Wednesday, July 12.

This comes after the House of Representatives approved in May the changes in income and excise tax as proposed in House Bill (HB) 5636, promising a pro-poor initiative in reducing income tax. 

Watch the hearing on Rappler. – Rappler.com

MANILA, Philippines – Diversified conglomerate San Miguel Corporation (SMC) plans to go into electronics manufacturing and clean energy.

San Miguel president and chief operating officer Ramon Ang told reporters on the sidelines of Top Frontier Holdings' annual stockholders' meeting that his conglomerate aims to venture into electronics manufacturing, which he described as something that could deliver high margins.

"We are now studying how to go to electronic microchips. That is our aspiration," Ang said on Wednesday, July 12, without giving further details.

He cited as an example South Korea's electronics giant Samsung, which exported $40 billion worth of microchips to Vietnam alone.

"We are going to that direction… the 3rd wave of diversification is to go the next generation which is electronics," Ang said.

"Can you imagine if we can go to the next generation? If we can produce like microchips, plug-ins, smart telephones, tablets, and smart television? That is where we are going."

Clean energy

Aside from electronics manufacturing, Ang said they are also interested in clean energy including hydro, solar, and tidal energy sources. 

San Miguel already operates several coal energy plants under its power unit.

From being a food and beverage company, San Miguel has diversified into high-growth industries such as infrastructure, power generation, oil manufacturing, and mining.

In the next 5 years, Ang expects San Miguel to triple its income. (READ: San Miguel to buy stake in BMW supplier in PH)

"We expect 2017 to be better than 2016 level. We are also projecting that in the next 5 years the company will triple its net income," he said.

Meanwhile, Top Frontier could start constructing its planned $1.5-billion nickel processing plant by 2018.

Ang said the feasibility study for the proposed 200,000-metric-ton nickel processing plant near its Nonoc mining site will be completed by the end of the year.

"We are now finalizing the feasibility study of the project then the technical and financial study. If the results are positive we will go for financing and probably start construction by next year," he said.

Top Frontier, through its mining unit Clariden Holdings Incorporated, holds several mining tenements in various areas including Nonoc Nickel Project and Mt Cadig Nickel Project.

It also owns exploration permits for certain areas under the Bango Gold Project, and has pending applications and production sharing agreements for other areas.

The share price of San Miguel on Wednesday closed lower by P0.30 to P103 each.– Rappler.com

MANILA, Philippines – The Department of Finance (DOF) received a P25-billion offer from tobacco firm Mighty Corporation to settle its tax disputes with the government before the month ends, to be funded by a P45-billion sale of its assets to JT International Philippines (JTI).

"We are studying the offer," Finance Secretary Carlos Dominguez III said in a statement on Wednesday, July 12, referring to a settlement proposal sent by Mighty Corporation to Bureau of Internal Revenue (BIR) Commissioner Caesar Dulay through a letter dated July 10, 2017.

The tobacco firm is facing 3 tax cases before the Department of Justice (DOJ), totaling P37.88 billion.

The letter signed by Mighty Corporation president and director Oscar Barrientos said the company was expressing "willingness to settle all such excise and tax issues and respectfully offer as settlement ... the total sum of P25 billion."

Barrientos further explained that JTI would buy Mighty Corporation's manufacturing and distribution business and assets, along with the intellectual property rights associated with these assets.

The sale would include "those owned by the company, Wong Chu King Holdings Incorporated, and other affiliates to JTI or any of its affiliates for a total purchase price of P45 billion exclusive of value added tax."

JTI is the global tobacco firm behind the brands Mevius (previously Mild Seven), American Spirit, and Winston, among others.

Dominguez noted, however, that Mighty Corporation's settlement offer for its tax deficiencies is separate from criminal charges that might be filed in court by the BIR against the company.

Settlement details

Mighty Corporation's offer is broken down as follows:

• P3.5 billion for deficiency excise taxes on its cigarette products that are now the subject of the 3 tax cases pending before the DOJ
• P21.5 billion representing the liabilities of the company and its shareholders, as well as the company officers, for all internal revenue taxes including income tax from 2010 to 2016 and the tax period up to the closing of the proposed transaction with JTI, and all transaction taxes related to the deal with JTI

"The initial payment of P3.5 billion will be paid by the company ... on or before July 20, 2017. A binding Memorandum of Agreement in relation to the Proposed Transaction [with JTI] will be concluded shortly (and prior to July 20, 2017) subject to finalizing terms with JTI and JTI completing its due diligence," Barrientos' letter read.

Mighty Corporation said the balance of P21.5 billion will be paid upon or after the closing of the planned deal with JTI.

In the letter, Barrientos also asked that the BIR issue a final tax assessment and clearance for Mighty Corporation if the settlement is accepted.

"We also respectfully request the BIR to issue to the Company and its shareholders and officers following closing of the proposed transaction (with JTI) and the payment of the P21.5 billion the relevant Certificate of Availment of Compromise, a final tax assessment for all the Company's excise and other tax issues described above, and relevant tax clearances to the Company, its shareholders, and officers," he said.

Barrientos added that Mighty Corporation's operations would be halted once the JTI deal is sealed. – Rappler.com

MANILA, Philippines – The reputation of KPMG RG Manabat & Company, one of the top 5 auditing firms of listed companies, is on the line over alleged inflated financial statements of 2GO Group Incorporated, which are now being investigated by the Securities and Exchange Commission (SEC).

Other than 2GO, KPMG RG Manabat has also been the auditor of 34 other listed firms – such as San Miguel Corporation – over the last few years.

Other firms being audited by KPMG include Asian Terminals Incorporated, Cosco Capital Incorporated, DoubleDragon Properties Corporation, Macay Holdings Incorporated, and PhilWeb Corporatiion.

In a statement released on Tuesday, July 11, KPMG RG Manabat said it is confident that its audit was "in compliance with the Philippine Standards on Auditing."

"Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements," it added. (READ: 2GO management, auditors may face over P1-M fine)

Required reports

Companies with securities registered with SEC as well as those pubicly listed are required to disclose annual and quarterly financial reports. These are important documents that investors and stockholders examine when making a business decision to partner with or invest in a company. 

Rule 68 of the Securities Regulation Code also requires publicly-held companies to file financial reports that are accurate, truthful, and complete and prepared according to a set of "Internationally Accepted Principles of Accounting."

Under SEC rules, these must also be examined and reported by internal and independent auditors to ensure that details in reports are accurate and true.

"Financial statements originate from the company’s finance officials. Aside from external auditors, they will also be held liable if proven there is fraudulent misrepresentation, or even deficiencies, meaning they failed to comply to international financial reporting standards. That's under Rule 68," SEC chairperson Teresita Herbosa said on the sidelines of an event in Makati City on Tuesday.

Roberto Manabat, a local partner of KPMG, should be well aware of this as he was the first General Accountant of SEC. In this capacity, Manabat helped to put in place standards for the review of financial statements submitted by listed companies.

What's being investigated?

2GO last week restated its 2015 and 2016 financial statements, after a special audit requested by the firm's new management – a development that is turning out to be a major accounting scandal.

The restated financials pruned a whopping 90% off 2GO's net income in 2015 to P109.131 million. It also turned out that its 2016 net income should have been 74% lower than what was reported.

The special audit conducted by SGV & Company also showed that in the 1st quarter of 2017, there was a net loss of P264.86 million, instead of the earlier reported net income of P267.562 million.

Sharon Dayoan, vice chairperson and head of audit of KPMG RG Manabat, told Rappler on Thursday, July 13: "The restatements that you now see in the news are essentially relating to items of judgment and estimates made by (2GO's) management. When we did our audit, it was an audit on the judgment and estimates made by management at the time that we had to deliver our opinion." 

But questions now persist as to whether the buy-in price of the group of Dennis Uy and SM Investments Corporation – which recently acquired stake in 2GO – was bloated, too, assuming the financial reports were inflated.

The restated financial statements came after SM Investments Corporation acquired a 34.5% stake in 2GO's parent company for $124.50 million. Coincidentally, Manabat has also been an advisor to the board of SM Investments Corporation for good corporate governance since 2016. (READ: How SM Investments acquired stake in 2GO)

Market share

Data from the Philippine Stock Exchange (PSE) showed that the top 5 external auditing firms as of December 2016 are the following:

• Sycip, Gorres, Velayo & Company (SGV)
• Punongbayan & Araullo
• KPMG RG Manabat
• Reyes, Tacandong & Company
• Isla Lipana & Company

Together, these 5 external auditing companies cater to 86%, or 261 of the 304 total companies listed on the local bourse. (Editor's note: KPMG RG Manabat is the auditor of Rappler)

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The remaining 14% of PSE-listed companies are audited by 23 other external auditing companies.

Data from the PSE likewise showed that more than half of the listed firms’ financial statements – 54% to be exact – are checked by SGV.

This means that SGV double checks the numbers and overall financial performance of a majority of the country’s most valuable companies, which include those led by the likes of the Sys, Ayalas, Gokongweis, Aboitizes, Lopezes, and Manuel V. Pangilinan.

KPMG RG Manabat and Punongbayan & Auraullo follow SGV, auditing a combined 24% of listed companies.

Moreover, KPMG RG Manabat and Punongbayan split this evenly with about 12% of PSE-listed companies audited by each.

SGV and breakaway groups

In the case of 2GO, SGV used to be its external auditor. However, in 2014, the Board of Directors of 2GO replaced SGV with KPMG.

Former 2GO chief Sulficio Tagud Jr told Rappler the decision was because of a "major disagreement with SGV on the matter of treating the deferred tax asset during a 2013 audit."

This issue was escalated up to the level of the SEC, Tagud said.

SGV used to be the go-to accounting firm of almost all listed firms in the local exchange.

Washington Sycip, an icon of Philippine business who founded the local accounting firm after World War II, has a vast network of clients, especially Who’s who in Philippine business.

However, infighting in SGV led to partners putting up their own firms. The local partners of KPMG – Roberto Manabat and Emmanuel Bonoan, as well as their predecessors, Mario Mananghaya and Jaime Laya – and the founders of other industry competitors are mostly or all SGV alumni.

The collapse of Enron, which was audited by SGV’s former foreign partner, Arthur Andersen, also shook up the local industry as global giant Ernst & Young decided to drop its local partner, Punongbayan & Araullo, to join forces with the dominant SGV.

As the Philippine economy grew and as more multinational companies set up shop here, SGV’s competitors aligned with Ernst & Young’s global rivals, further reducing SGV’s dominance over the years.

KPMG RG Manabat has been among the beneficiaries of these shifts.

Due process

When it comes to choosing an external auditor to go over the financial performance and details of a company, a company’s board and management has the power to choose who it employs to carry out this task.

Below is a list of external auditors most frequently chosen by the 304 listed companies.

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For now, the investing public needs a firm answer as to whether there are deficiencies in 2GO's earlier financial statements. – Rappler.com 

MANILA, Philippines— Lucio Tan-led flag carrier Philippine Airlines (PAL) announced it will resume flights from Manila to Abu Dhabi by the end of October despite an on-going diplomatic standoff between Qatar and its gulf neighbors.

“Effective October 31, PAL shall resume its nonstop thrice weekly service between Manila and Abu Dhabi after experiencing increased demand for flights on the route,” the airline said in a statement on July 13.

PAL earlier suspended flights from Manila to Abu Dhabi on July 8 of this year due what it then called “route assessment initiatives”. 

The airline will operate flight PR 656 – every Tuesday, Thursday and Saturday – departing Manila at 11:45AM and arriving in Abu Dhabi at 5:45PM; PR 657 operates on the same days leaving Abu Dhabi at 7:30PM local time and touching down in Manila at 8:50AM the following day.

PAL also said it will offer bi-class service (business and economy) across all its Middle East routes by the end of the year, providing passengers on board with amenities, free baggage allowance, as well as inflight entertainment.

Aside from Abu Dhabi, PAL also operates flights to Saudi Arabian cities Riyadh (daily), Dammam (5x weekly), Jeddah (3x weekly), as well as Kuwait (4x weekly) and Dubai (daily).

The carrier also flies to Doha in Qatar 4 times weekly but has announced it will not carry Qatari nationals on these flights in order to comply with guidelines issued by the gulf nationals currently arrayed against Qatar. – Rappler.com

MANILA, Philippines – Ayala-led Globe Telecom announced it has begun commercial deployment of a new massive multi-input, multi-output (MIMO) wireless network technology to enhance the connectivity of users in high-density areas.

Massive MIMO technology enables a mobile network to multiply the capacity of a wireless connection without requiring more antennas. It increases wireless throughput, accommodating more users at higher data rates with better reliability while consuming less power.

The commercial deployment of the new technology comes after Globe did initial tests in the Makati financial district earlier this year.

Globe noted that based on initial test results, the technology improves capacity up to 6 times compared to a regular site.

"The use of massive MIMO technology is an important component of our goal to stay ahead of the demand curve for data capacity in densely populated and high-foot traffic areas," said Globe senior vice president for program governance Joel Agustin in a statement on Thursday, July 13.

He added that deployment of the massive MIMO technology makes use of the 2600 megahertz (MHz) frequency that Globe gained after it acquired half of San Miguel Corporation's telecommunications assets last year.

The initial rollout covers 150 wireless broadband sites, located mostly in Southern Luzon and Northern Luzon.

Agustin also pointed out that earlier this month, "Globe became the first mobile operator in the world to activate massive MIMO using 2 Carrier Component carrier aggregation (2CC), which doubles LTE capacity and delivers faster internet experience."

Compared to the 1CC, Globe's current deployment of massive MIMO, the 2CC technology uses two distinctly separate blocks of the 2600 MHz spectrum aggregated by LTE-Advanced equipment to deliver faster internet speeds.

Agustin compared this to increasing the number of lanes in a highway from a single lane to two lanes, allowing for faster speed.

Globe previously said it would spend around $600 million this year on upgrading its mobile data infrastructure, focusing particularly around developing the 700 MHz and 2600 Mhz bands it acquired from San Miguel. – Rappler.com

Who can apply for the Seal of Honesty (SOH) Certification Program?

All taxpayers, both individuals or corporations, may apply for the program, especially:

• Self-employed and professionals
• Family businesses, regardless of size and industry
• Those being audited regularly by the Bureau of Internal Revenue (BIR)

What are the criteria to qualify?

Individual and corporate taxpayers who will subscribe to the certification program will commit to:

• settle all open cases and pending assessments
• observe full and honest compliance with all BIR regulations and requirements at all times
• sign the Integrity Pledge to promote and uphold honesty and integrity in paying taxes, and in dealing with all government agencies, customers, and suppliers without compromises
• commit not to bribe or to stop bribing BIR examiners
• increase voluntary compliance by at least 20% in total tax payments for those who are regularly audited by the BIR, based on the level of their compliance

How can I get the SOH?

The certification process includes the following:

• signing of the Integrity Pledge and commitment to promote a culture of honesty and integrity in paying taxes
• attend a roundtable discussion on paying the right taxes organized by your business organization, chamber, or association in partnership with CSR Philippines
• enroll in the certification program
• have a preliminary evaluation to determine the risk assessment and level of compliance
• undergo tax planning and a compliance review
• submit a compliance report to the Evaluation Committee under the Office of the Commissioner of Internal Revenue
• deliberation by the Board of Accreditors composed of representatives from the BIR, Department of Trade and Industry (DTI), CSR Philippines, ISA, and Integrity Initiative (II)
• awarding of the SOH 
• revalidation after one year
• renewal every year

What are the benefits of subscribing to the certification program?

Upon confirmation of the Evaluation Committee under the Office of the Commissioner of Internal Revenue and approval of the Board of Accreditors, the following incentives will be extended to certified taxpayers:

• issuance of annual tax clearance, without prejudice to information not available at the time of issuance
• Last Priority Audit
• other privileges which the DTI and other government agencies may also extend to certified honest taxpayers

How long is the validity of the SOH?

One (1) year and renewable every year subject to revalidation of CSR Philippines.

Who will award or decide if a taxpayer is qualified for the SOH?

There will be two independent bodies to review and validate compliance of a taxpayer who applied for the SOH. First, the Evaluation Committee under the Office of the Commissioner of Internal Revenue is tasked to verify full compliance with the SOH requirements.

Second, upon endorsement of CSR Philippines and confirmation of the Evaluation Committee, the Board of Accreditors, composed of representatives from the BIR, DTI, CSR Philippines, ISA, and II will approve the awarding of the SOH upon final deliberation.

Does this grant full immunity to taxpayers? Does this mean the BIR will no longer audit certified taxpayers?

No. The mandate of the BIR is to assess and to collect the right taxes. CSR Philippines aims to help the BIR as its advocacy partner, to collect the right taxes through voluntary compliance of taxpayers who will undergo the SOH certification. However, CSR Philippines does not in any way participate in tax administration. Any taxpayer, with or without the SOH, found to have violated Philippine tax laws and regulations will be subject to audit and investigation.

Need more information on how and where to apply?

Send inquiries to info@sealofhonesty.ph or call (+63) 2 372 5727. – Rappler.com

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2016 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founder of the Abrea Consulting Group and Center for Strategic Reforms of the Philippines (CSR Philippines). He currently serves as Adviser to the Commissioner of Internal Revenue of the Philippine government on tax administration reform in promoting inclusive growth. Follow Mon on Twitter (@askthetaxwhiz) or visit his Facebook page. You may also email him at consult@acg.ph.

WASHINGTON, DC, USA – CBS News and the BBC on Thursday announced a new editorial and newsgathering partnership that aims to boost their global strength against rivals such as CNN.

The US and British television news giants will share video, editorial content, and other resources in New York, London, Washington and around the world, according to a joint statement.

"There's never been a more important time for smart, courageous coverage of what's happening in the world," said James Harding, the BBC's director of news and current affairs.

"This new partnership between the BBC and CBS News is designed to bring our audiences – wherever you live, whatever your point of view – news that is reliable, original and illuminating.  Our ambition is to deliver the best in international reporting on television."

The deal brings together two major television news organizations and comes weeks after US-based NBC finalized a deal to take a 25% stake in France-based Euronews to boost its global scale.

CBS News president David Rhodes said his organization "is completely committed to original reporting around the world -- a commitment clearly shared by the BBC."

He added, "There's no better partner to strengthen and extend our global coverage than BBC News."

The two groups sharing of content between CBS News and BBC News will begin immediately and that additional newsgathering elements would be rolled out in the coming months. 

BBC News claims to be the largest broadcast news operation in the world with more than 2,000 journalists and 48 newsgathering bureaus, according to its website.

CBS News is part of the large CBS television network with offices around the United States and a handful of overseas locations.

This new partnership replaces the BBC’s current arrangement with Disney-owned ABC News, according to Harding who called that relationship "long and fruitful." – Rappler.com

MANILA, Philippines – Sulficio Tagud Jr, who was president and chief executive officer of 2GO Group Incorporated for 6 years, denied allegations that the company's profits had been inflated in 2015 and 2016. He described the restatement of 2GO's financial statements for those two years as "an attack on the integrity" of its former officials.

"This is totally false. I am fully confident of our audits. When the new management took over, we approved financial statements in April this year. We then passed that on to internal auditors and then they approved it. The board also approved. We even did audits twice a year – June and December – just to make sure," Tagud told Rappler in a phone interview on Thursday, July 13.

He was referring to the group led by businessman Dennis Uy who took over 2GO's board and management in April.

2GO last week restated its 2015 and 2016 financial statements, after a special audit requested by the firm's new management – a major accounting scandal that is now being investigated by the Securities and Exchange Commission (SEC). 

The restated financials pruned a whopping 90% off 2GO's net income in 2015 to P109.131 million. It also turned out that its 2016 net income should have been 74% lower than what was reported.

The special audit conducted by SGV & Company also showed that in the 1st quarter of 2017, there was a net loss of P264.86 million, instead of the earlier reported net income of P267.562 million. (READ: Doubts hound KPMG following 2GO accounting scandal)

This was followed by the resignation of Jeremias Cruzabra as chief financial officer and treasurer. He was replaced by William Charles Howell.

"The only explanation for this fiasco is that the new external auditor might have found an opportunity to get back at us," said Tagud, who retired from both the management and the board last April.

SGV used to be the external auditor of 2GO. But in 2014, the 2GO board of directors replaced SGV with the accounting giant's rival KPMG RG Manabat & Company.

Deferred tax asset issue

Tagud explained that the 2GO board decided to replace SGV in 2014 due to a major disagreement between management and the auditing firm over how to treat a deferred tax asset during the 2013 audit. 

"In 2014, the company (finances of 2GO) turned around. And because there were losses in the previous two years, there was net loss carryover. It is in deferred tax assets," Tagud said.

A deferred tax asset is an accounting item on a company's balance sheet that may be used to reduce taxable income. 

"Part of that deferred tax asset, which is more than P300 million, would have been used the following year, 2015, but SGV that time said we have to write it off so you make money. And then the board decided to fire SGV because they insisted for us to write that off," he added.

This issue was even escalated up to the level of the SEC, the ex-2GO chief stressed, finding irony now in the investigation that the corporate regulator has recently initiated. (READ: 2GO management, auditors may face over P1-M fine) 

The deferred tax assets fit the details that the new board and management of 2GO disclosed to the investors on July 11. Businessman Dennis Uy described the discrepancies as "non-cash and non-recurring,"

"The restated financials were subsequently disclosed for fairness and transparency to the shareholders and the investing public. The restatement also reflects the commitment of the new management and board to raise corporate governance standards in the company," Uy had said.

In its separate statement, KPMG Manabat maintained that it had performed the audits of 2GO in compliance with the Philippine Standards on Auditing.

KPMG also said it has requested but has yet to receive from SGV the full details of the restatement of its 2015 and 2016 financial statements. 

"As a courtesy procedure, when the financial statements audited by an auditor will be restated by another auditor, the current auditor should at least discuss and seek concurrence from the prior auditor," Tagud said. 

Tagud vs Dennis Uy

Tagud hinted of two squabbles to explain the ongoing accounting saga: Aside from the one between  2GO's previous management and SGV, he also referred to the previous rift between him and businessman Dennis Uy, a Davao-based businessman close to President Rodrigo Duterte.

"SGV has been the auditor of Nenaco from the time I came in all the way to 2014. It was also SGV for Aboitiz Transport," he said, highlighting the previously strong auditor-client relationship with the auditing firm.

Nenaco, or Negros Navigation, was the shipping company acquired by a management team led by Tagud from infrastructure firm Metro Pacific Investments Corp (MPIC) more than a decade ago.

Nenaco was the original partner of Dutch firm KGLI BV in holding firm KGLI-NM, which until recently was a major shareholder of 2GO.

The Filipino and Dutch group go all the way back. In 2008, they wanted to acquire Nenaco’s domestic rival Aboitiz Transport Shipping Corp, but the foreigners’ finances were strained by the global financial crisis at the time. Nenaco was eventually able to proceed with the acquisition after it reached an agreement with China Asean Marine BV, which infused additional equity in 2010 simultaneous with the KGLI NM-Aboitiz Transport $81-million deal.

China Asean, a private equity fund sponsored by China Export-Import Bank, became the controlling stakeholder of the combined companies, which were later rebranded as 2GO.

Tagud and the Dutch group squabbled after the latter sold its stake in KGLI NM to Dennis Uy’s firms in September 2016. The Dutch firm had voting stocks and beneficial interests in 2GO through its stake the holding firm KGLI NM, which owns a stake in Nenaco that in turn owns a substantial stake in 2GO.

Citing his firms' 21% voting interest and 28% beneficial interest in 2GO following the deal with the Dutch, Uy said he was entitled to board seats in 2GO. Tagud's group, however, blocked Uy since he was left out of the deal.   

A bruising legal battle ensued: Uy sued the 2GO owners, and Tagud filed a case against the Dutch partners. After the regional court told the squabbling parties to bring their cases to an international arbitration court, which would have prolonged the legal saga, the clashes simmered down. Uy was eventually allowed on 2GO’s board in February 2017.

The country’s richest family followed in April after the Sy family-led SM Investments Corp acquired a 34.5% stake in 2GO for $124.50 million by buying the 2GO shares of China Asean. (READ: How SM Investments acquired stake in 2GO)

The Uy and Sy groups took over the board and management of 2Go that month. (READ: Phoenix boss Dennis Uy replaces Tagud as head of 2GO)

Tagud and the Sys

Tagud stressed that the Sy group and SGV were aware of the finances of 2GO even before the legal disputes started. 

He said the new owners and their affiliates conducted an extensive due diligence review prior to acquiring a majority stake in 2GO.

He specified that BDO Unibank Incorporated, the banking arm of SM Investments Corporation, and Ernst & Young, the foreign partner of SGV.

BDO has been the principal creditor bank of 2GO since 2011, he stressed. The logistics firm would periodically submit its financial reports to the bank. 

"On a yearly basis, BDO Unibank said it would conduct a financial evaluation of 2GO for the renewal of its credit facilities, and BDO never raised any issue regarding overstatement of any amounts," Tagud added.

He also said that way back in June 2016, SGV and Ernst & Young have already gone over the financial books of 2GO. At the time, the Singapore office of Ernst & Young was engaged by Dubai-based private equity investor, ABRAAJ, to conduct a due diligence. ABRAAJ was interested in partnering with him to acquire an interest in 2GO, he said.

"Ernst & Young, for its part, deputized SGV to assist it for this engagement. Again, they never raised any issue regarding misstatement or overstatement of any amounts," he said.

Tagud said that when Dennis Uy and SM were still negotiating with the principal shareholders of 2GO, they issued a formal advisory that they would complete their due diligence examination of 2GO prior to proceeding with the acquisition.

Rejecting any possible overstatement of the income of 2GO, Tagud said that from the inception of the partnership, he had always intended and, in fact, ventured to purchase the majority interest in 2GO from its then foreign partners.

"I negotiated with BDO and, after conducting the necessary due diligence examinations, BDO approved a $120-million loan to purchase the shares of the foreign partners, the very same shares now owned by the SM Group and Dennis Uy. The due diligence examination did not contain any finding as to the overstatement of income in 2GO," Tagud said.

He added that the former management of 2GO will welcome any inquiry by the SEC and the Philippine Stock Exchange on the supposedly overinflated figures.

Shares of 2GO went up by 6.58% to P24.30 on Thursday. – Rappler.com