Tuesday, October 29, 2013

PREPARING FOR AN EARTHQUAKE: Learning from the Metro Manila Earthquake Impact Reduction Study

By Siesta-friendly

The 7.2 magnitude earthquake last week that severely damaged infrastructure in Bohol and Cebu and caused about 200 deaths has moved us to be more concerned about the high-intensity earthquake that is expected to occur in Metro Manila. 

Apart from the fact that we reside in Metro Manila, it is also where the government and its departments, agencies and bureaus are headquartered, where the legislature convenes, where the highest levels of the judiciary are located, where news and information services are based, where much economic and financial activity are centered.  If Metro Manila is devastated, it would be as if the entire country were devastated.

Between 2002-2004, apparently mindful of the just-around-the–corner disaster, Japan International Cooperation Agency (JICA), MMDA and PHIVOLCS made a study called the Metro Manila Earthquake Impact Reduction Study (MMEIRS) to “1) Evaluate seismic hazards, damages and vulnerability of Metro Manila”, and “2) Prepare framework of master plan for earthquake disaster management.”

Looking around our concrete jungle, it’s hard to imagine how we implemented, and learned from, the MMEIRS report.   Watching and reading the news (including learning about the government’s delayed and inadequate assistance to the earthquake victims in Bohol), we know that we are not prepared in terms of our infrastructure, organization, resources and preparedness.  

There are several possible sources of an earthquake that will affect Metro Manila.  But based on the MMEIRS study the “West Valley Fault (WFV) and the East Valley Fault (EFV), which run north to south along the west and east edge of the Marikina Valley are thought to pose the greatest threat to Metropolitan Manila”.

There are many ways we should be addressing the threat, preventively and reactively.  To help envision what we should be doing pre- and post- earthquake, we have taken an excerpt from the MMEIRS report projecting and detailing the immediate effects of a 7.2 magnitude earthquake in Metro Manila. 

The scenarios should help us realize what we could do now to meet the needs of the disaster we all know is coming.

1)      Day 1

Evening. August 26, 2003 is a typical Tuesday, the traffic, the crowd, the sunset at 6:14 as announced by PAGASA. Except that today you are not coming home from work, but from the WORKSHOP at Shangrila Hotel. You are almost home, looking forward to a simple tinolang Manok that you know is stewing in your kitchen.

You get off from the bus and navigate your village road. As you are walking the last few meters to your gate, you feel a sudden jolt. It sort of pushes you forward. At first you don’t know what it is. But the ground continues shaking, up and down, sideways, getting stronger every second. You fall to the ground, unable to keep standing. You hear a booming sound. You hear screams from people inside their homes. You hear breaking glasses. Telephone and power poles sway violently. Then the power goes off. In front of you, the village road is heaving, as if you are riding waves. The strong ground shaking goes on for 50 seconds. It is the longest 50 seconds of your life.

The ground shaking has stopped but you remain on the ground, still feeling dizzy. You try to get up, your knees shake under you. People start pouring out of their homes. Panic and confusion are everywhere. Occasional cries and wails add to the confusion. Around you are toppled poles and fences, collapsed houses, cracked roads, broken water pipes.

You go home as quickly as you can. You recognize your family amongst the crowd on the village street. They are all home, shaken but unhurt. You let out a sigh of relief and say a prayer of thanks. But your family refuses to enter your home. A barangay leader gives instructions to you and your neighbors to move to the basketball court to keep away from objects that may fall or topple.

You move your family as instructed. You try to make a call to other relatives but your mobile phone has no signal. Still you dialed a number. It didn’t work. You finally walked back to check your home. But home is something you barely recognize. Everything seems to be piled up on the floor – appliances, shelves, books, lighting fixtures, family portraits, clothes, your prized Jollibee collectibles, even the tinola dinner.

Among the pile of mess on the floor, you pick up the old battery-operated transistor radio that your mother-in-law refuses to part with. You turn it on. At first you only get static. You play with the dials and catch this piece of news: PHIVOLCS issued a bulletin that says a devastating earthquake, with magnitude 7.2 generated by the nearby West Valley Fault, hit Metropolitan Manila. The ground shaking was felt at PEIS VIII in Metropolitan Manila. Weak to strong aftershocks are expected.

You rummage for blankets and go back to the basketball court. You try to think happy thoughts knowing this would be a very long night. You stay tuned in to the radio. News trickles in.

-          There is a major power outage in Metropolitan Manila as well as in the neighboring provinces in Luzon.
-          Telephone lines, including cellular networks, are down.
-          Many residential houses are heavily damaged and collapsed.
-          Some school buildings collapsed.
-          A few hospitals are heavily damaged, ICU patients need to be transferred, and other patients need to be evacuated.
-          Fires broke out in several residential clusters, chemical plants, and few other factories and hospitals.
-          Hundreds, if not thousands, are estimated trapped dead or injured from collapsed or burning houses, buildings and factories.
-          Abandoned cars, some damaged by falling objects, littered the streets of        Metropolitan Manila.

Within the next few hours after the earthquake, the National Disaster Coordinating Council convened. Not all the member agencies have representatives immediately available.

2)      Day 2-3

You are one of the more fortunate. No one is injured in your household. But your house is damaged and you are not sure if it will survive the next strong aftershock. Also, food and drinking water are becoming scarce. The barangay leaders and community members work together to provide for everyone.

Overnight you felt several moderate to weak after shocks. There is still no electricity, telephone communication, and water. Haze from burning buildings darkens the horizon. Fires still spread unabated.

News reports give more dismal picture of the extent of damage brought by the earthquake:

The President declares a state of calamity. She mobilizes the Armed Forces of the Philippines for rescue, clearing of debris, and construction of temporary shelters. She suspends schools and offices.

Philippine flags fly at half-mast.

PHIVOLCS confirms movement of the West Valley Fault after it conducted an aerial survey over Metropolitan Manila.

Volunteer rescue groups from Olongapo and Baguio City coordinate with the NDCC.

Back-up power generators are available only in critical public and private offices.

There are more reports of collapsed houses, now numbering in the thousands, mid-to high-rise buildings, and major bridges.

Many roads are impassable.

The LRT and MRT railways remain standing but not operational.

Reports of casualties continue to rise to several thousands.

Several thousand families have lost their homes and begin to occupy open spaces.

People rescued from collapsed buildings show crush syndromes and given medical attention on site in temporary medical shelters. They cannot be transferred immediately to hospitals because ambulances cannot get through the roads littered with debris and cars.

The police contain random acts of looting.

3)      Day 4-7

You continue to occupy the basketball court. There is still no power, communication and water supply.

In the tent clusters that sprouted in parks and other open spaces, the lack of clean water supply makes the outbreak of infectious diseases a threat.

In hospitals, injured patients are lined up even along corridors. Again, the lack of clean water is a major problem.

Many people, especially children, suffer from shock, traumatized by the strong ground shaking, the sight of destruction, or being temporarily trapped.

Bodies exhumed from rubbles are lined up along the streets. The air has the distinct smell of decay.

International volunteer rescue teams coordinate with the NDCC. Rescue will continue in the next few days.

Clearing of debris will continue for several weeks to months. Bodies will continue to be recovered among building debris.

Relief goods are distributed in evacuation centers. Some evacuation centers receive more relief goods than others.

Neighboring Asian countries pledge and extend technical, medical and other forms of support.

The Government appeals to those with capabilities to join forces in responding to the disaster. Recovery and rehabilitation will take years and years.

The MEEIRS report (perhaps politely) omits the added chaos resulting from government corruption or political machinations in providing (or not providing) relief.  The latest example of this being the reported actions of Maribohoc Mayor Leoncio Evasco Jr. in halting the Red Cross’ activities of doling out relief goods to Bohol quake victims because the Red Cross refused to hand over the relief goods to the local government for the latter to apportion and distribute the goods themselves. 

Not to mention the additional mess arising from the likely lack of government funds and resources to help everyone. The Bohol earthquake occurred October 15, 2013. Philstar reports today, October 24, that Department of Budget and Management Secretary Florencio Abad “said the entire P7.5 billion calamity fund, as well as the P1 billion contingency fund “have already been wiped out.” Due to the disasters that fell upon different parts of the nation during the previous months, the funds were gone even before the earthquake happened.

So how do we prepare for the natural and man-made disasters?  Try not to rely on the government too much. We are the best people to save ourselves. Talk to a structural engineer to check where your building/home is vulnerable and retrofit accordingly.  Periodically have earthquake drills or discuss (and brainstorm) with family or co-workers ways to prevent damage/harm, and exit the house/building, when an earthquake occurs.  Identify clear areas (parks and vacant lots away from structures that could topple or break) where you can camp out (for days) while you wait until the aftershocks end.  Identify where you can easily access clean water.  Purchase a fire extinguisher for when fire breaks out.  Prepare a first aid kit readily accessible for when you are rushing to get out of the house/building when the tremors start.  Have a reliable radio handy. Always have enough stock of water, medicines, batteries, flashlights, canned goods, crackers, other emergency supplies.  

We may sound alarmist but we can’t turn a blind eye to what we know is a disaster that is sure to happen. 


Thursday, October 17, 2013

BULLISH ON ANTI-BULLYING: Anti-Bullying Act of 2013

By Siesta-friendly

The Anti-Bullying Act of 2013 (R.A. 10627) was just signed into law last month. The title of the Act An Act Requiring All Elementary And Secondary Schools To Adopt Policies To Prevent And Address The Acts Of Bullying In Their Institutions” is telling in that anti-bullying is legally proscribed only at the elementary and secondary levels.

Bullying, definition

Anyway, the definition of bullying under the Act seems to be all-encompassing, covering physical and emotional harm, and including in its scope bullying via written, verbal or electronic means.

Bullying is defined as -

“any severe or repeated use by one or more students of a written, verbal or electronic expression, or a physical act or gesture, or any combination thereof, directed at another student that has the effect of actually causing or placing the latter in reasonable fear of physical or emotional harm or damage to his property; creating a hostile environment at school for the other student; infringing on the rights of the other student at school; or materially and substantially disrupting the education process or the orderly operation of a school; such as, but not limited to, the following:

a.       Any unwanted physical contact between the bully and the victim like punching, pushing, shoving, kicking, slapping, tickling, headlocks, inflicting school pranks, teasing, fighting and the use of available objects as weapons;
b.      Any act that causes damage to a victim’s psyche and/or emotional well-being;
c.       Any slanderous statement or accusation that causes the victim undue emotional distress like directing foul language or profanity at the target, name-calling, tormenting and commenting negatively on victim’s looks, clothes and body; and
d.      Cyber-bullying or any bullying done through the use of technology or any electronic means. (Sec. 2)

Required Anti-Bullying Policies

Of course, the Act doesn’t stop at defining the prohibited acts but also requires schools to “adopt policies to address the existence of bullying in their respective institutions. Such policies shall be regularly updated and, at a minimum, shall include provisions which:

(a)    Prohibit the following acts:

(1)    Bullying on school grounds; property immediately adjacent to school grounds; at school-sponsored or school-related activities, functions or programs whether on or off school grounds; at school bus stops; on school buses or other vehicles owned, leased or used by a school; or through the use of technology or an electronic device owned, leased or used by a school;
(2)    Bullying at a location, activity, function or program that is not school-related and through the use of technology or an electronic device that is not owned, leased or used by a school if the act or acts in question create a hostile environment at school for the victim, infringe on the rights of the victim at school, or materially and substantially disrupt the education process or the orderly operation of a school; and
(3)    Retaliation against a person who reports bullying, who provides information during an investigation of bullying, or who is a witness to or has reliable information about bullying;

(b)   Identify the range of disciplinary administrative actions that may be taken against a perpetrator for bullying or retaliation which shall be commensurate with the nature and gravity of the offense: Provided, That, in addition to the disciplinary sanctions imposed upon a perpetrator of bullying or retaliation, he/she shall also be required to undergo a rehabilitation program which shall be administered by the institution concerned. The parents of the said perpetrator shall be encouraged by the said institution to join the rehabilitation program;

(c)    Establish clear procedures and strategies for:

(1)    Reporting acts of bullying or retaliation;
(2)    Responding promptly to and investigating reports of bullying or retaliation;
(3)    Restoring a sense of safety for a victim and assessing the student’s need for protection;
(4)    Protecting from bullying or retaliation of a person who reports acts of bullying, provides information during an investigation of bullying, or is witness to or has reliable information about an act of bullying; and
(5)    Providing counseling or referral to appropriate services for perpetrators, victims and appropriate family members of said students;

(d)   Enable students to anonymously report bullying or retaliation: Provided, however, That no disciplinary administrative action shall be taken against a perpetrator solely on the basis of an anonymous report;
(e)   Subject a student who knowingly makes a false accusation of bullying to disciplinary administrative action;
(f)     Educate students on the dynamics of bullying, the anti-bullying policies of the school as well as the mechanisms of such school for the anonymous reporting of acts of bullying or retaliation;
(g)    Educate parents and guardians about the dynamics of bullying, the anti-bullying policies of the school and how parents and guardians can provide support and reinforce such policies at home; and
(h)   Maintain a public record of relevant information and statistics on acts of bullying or retaliation in school: Provided, That the names of students who committed acts of bullying or retaliation shall be strictly confidential and only made available to the school administration, teachers directly responsible for the said students and parents or guardians of students who are or have been victims of acts of bullying or retaliation.” (Sec. 3)

Implementation of Anti-Bullying Policies

So how is the actual act of bullying addressed? Here’s the procedure:

“Any member of the school administration, student, parent or volunteer shall immediately report any instance of bullying or act of retaliation witnessed, or that has come to one’s attention, to the school principal or school officer or person so designated by the principal to handle such issues, or both. Upon receipt of such a report, the school principal or the designated school officer or person shall promptly investigate. If it is determined that bullying or retaliation has occurred, the school principal or the designated school officer or person shall:

a)      Notify the law enforcement agency if the school principal or designee believes that criminal charges under the Revised Penal Code may be pursued against the perpetrator;
b)      Take appropriate disciplinary administrative action;
c)       Notify the parents or guardians of the perpetrator; and
d)      Notify the parents or guardians of the victim regarding the action taken to prevent any further acts of bullying or retaliation.

If an incident of bullying or retaliation involves students from more than one school, the school first informed of the bullying or retaliation shall promptly notify the appropriate administrator of the other school so that both may take appropriate action.” (Sec. 4)

Other responsibilities

All elementary and secondary schools shall provide students and their parents or guardians a copy of the anti-bullying policies being adopted by the school. Such policies shall likewise be included in the school’s student and/or employee handbook and shall be conspicuously posted on the school walls and website, if there is any. (Sec. 3)

All schools shall inform their respective schools division superintendents in writing about the anti-bullying policies formulated within six (6) months from the effectivity of the Act. Such notification shall likewise be an administrative requirement prior to the operation of new schools. (Sec. 5)

Beginning with the school year after the effectivity of the Act, and every first week of the start of the school year thereafter, schools shall submit a report to their respective schools division superintendents all relevant information and statistics on acts of bullying or retaliation. The schools division superintendents shall compile these data and report the same to the Secretary of the DepED who shall likewise formally transmit a comprehensive report to the Committee on Basic Education of both the House of Representatives and the Senate. (Sec. 5)

The Department of Education (DepED) shall include in its training programs, courses or activities which shall provide opportunities for school administrators, teachers and other employees to develop their knowledge and skills in preventing or responding to any bullying act. (Sec. 3)

Penalties for Noncompliance

Unfortunately, the law has left it to the Secretary of the DepED “to prescribe the appropriate administrative sanctions on school administrators who shall fail to comply with the requirements under this Act.” The only possible penalty under the law is that “erring private schools shall likewise suffer the penalty of suspension of their permits to operate.” (Sec. 6)

Merriam-Webster defines a bully as one who frightens, threatens or insults another or one who treats another abusively. Bullies are everywhere, not just in the elementary and secondary levels. Despite the scope of the Act being limited to only the elementary and secondary levels, we hope other school levels – and even government and corporate entities - can be inspired, influenced and guided by this Act so they may set the appropriate policies and procedures to prevent, address, and punish bullies. 

Apart from bullies, we should also look out for their enablers like parents who tolerate or allow their children to bully others, or parents who defend their children’s bullying. Remember the father who reportedly slapped, threatened and poked a gun at a high school senior bullied by his own son (inside the Colegio de San Agustins Head Teacher’s Office no less).  

It is strikingly sad and necessary that the State has to step in to make children behave humanely as parents fail in making sure they do.  But bullying has devastating (even fatal) effects that we cannot be dependent on the weakness of families for failing to rear their children in fostering even a basic human value like respect.   


Thursday, October 3, 2013

BIR’S SWORD OF DAMOCLES: BIR requires keeping Books of Account for 10 years

By Obiter07

3-year Period of Limitation Upon Assessment and Collection

What is the magic in having three (3) years pass?  Well, it’s the prescriptive period all taxpayers should love.  Under Section 203 of the National Internal Revenue Code, after this period has elapsed, this serves as a bar against any tax assessment or collection after the expiration of this period reckoned from the time of filing of the return:

SECTION 203. Period of Limitation Upon Assessment and Collection. - Except as provided in Section 222, internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three (3)-year period shall be counted from the day the return was filed. For purposes of this Section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day."

Read in conjunction with Section 235, the NIRC appears to provide that books of account need only be kept for three (3) years:

“SECTION 235. Preservation of Books of Accounts and Other Accounting Records. - All the books of accounts, including the subsidiary books and other accounting records of corporations, partnerships, or persons, shall be preserved by them for a period beginning from the last entry in each book until the last day prescribed by Section 203 within which the Commissioner is authorized to make an assessment. xxx


Any provision of existing general or special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives shall be subject to examination by the Bureau of Internal Revenue for purposes of ascertaining
compliance with the conditions under which they have been granted tax exemptions or tax incentives  and their tax liability, if any.”

Under the above provisions, once three years have passed, this BIR must forever hold its peace. 

New 10-year period for keeping Books of Accounts

However, a new Revenue Regulation will make the taxpayer wait much, much longer before he can rest easy on his past transactions.  REVENUE REGULATIONS No. 17 Series of 2013 is entitled “Presentation of Books of Accounts and Other Accounting Records” and extends the period of retention of books to ten (10) years -

“SECTION 2. RETENTION PERIODS. - All taxpayers are required to preserve their books of accounts, including subsidiary books and other accounting records, for a period of ten (10) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts.

The term "other accounting records" includes the corresponding invoices, receipts, vouchers and returns, and other source documents supporting the entries in the books of accounts. They should also be preserved for a period of ten (10) years counted from the date of last entry in the books to which they relate.

The term “last entry’ refers to a particular business transaction or an item thereof that is entered or posted last or latest in the books of accounts when the same was closed.

The foregoing notwithstanding, if the taxpayer has any pending protest or claim for tax credit/refund of taxes, and the books and records concerned are material to the case, the taxpayer is required to preserve his/its books of accounts and other  accounting records until the case is finally resolved.

Finally, unless a longer period of retention is required under the NIRC or other relevant laws, the independent Certified Public Accountant (CPA) who audited the records and certified the financial statements of the taxpayer, equally as the taxpayer, has the responsibility to maintain and preserve copies of the audited and certified financial statements for a period of ten (10) years from the due date of  filing the annual income tax return or the actual date of tiling thereof, whichever comes later.”

Ironically, the basis for extending this period relates to fraud.  In a sense, a taxpayer is bound to keep the records that will incriminate him in the future.   As cited in the regulation, Section 203 also refers to Section 222 of the NIRC which provides for exceptions to the three (3)-year period of limitation of assessment:

“SECTION 222. Exceptions as to Period of Limitation of Assessment and Collection of Taxes.

(a) In the case of a false or fraudulent return with intent to evade tax or of failure to file a return, the tax may be assessed or a proceeding in court for the collection of such tax may be filed without assessment, at any time within ten (10) years after the discovery of the falsity, fraud or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof.

(b) lf before the expiration of the time prescribed in Section 203 for the assessment of the tax, both the Commissioner and the taxpayer have agreed in writing to its assessment after such time, the tax may be assessed within the period agreed upon. The period so agreed upon may be extended by subsequent written agreement made before the expiration of the period previously agreed upon.”

The BIR cites as one basis for the extended period is the fact that a taxpayer’s accounting records shall be needed beyond the three (3)-year period if there is an investigation by the BIR for any falsity, fraud or omission in the returns which would be conducted “within ten (10) years after the discovery of the falsity, fraud or omission.”

These records are subject to examination upon demand by the BIR:

“SECTION 3. EXAMINATION AND INSPECTION. - All books, registers and other records, and vouchers and other supporting papers required by the BIR shall be kept at all times at the place of business of the taxpayer, subject to inspection by any internal revenue officer, and upon demand, the same must be immediately be produced and submitted for inspection (Section 20 of Revenue Regulations No. V-1).

They may be examined and inspected for purposes of regular audit or extraordinary audit, requests for exchange of information by a foreign tax authority under Sections 6 and 71 of the NIRC, and in the exercise of the Commissioner's power to obtain information under Section 5 of the NIRC, among others.

Examination and inspection of books of accounts and other accounting records shall be done in the taxpayer's office or place of business or in the office of the BIR.”

                Any failure to comply will make a party liable for penalties:

“SECTION 4. PENALTIES. - Any violation of the provisions of these regulations shall be subject to penalties provided in Sections 266, 275, and other pertinent provisions of the NIRC; and Section 6 of Republic Act No. 10021 (the “Exchange of information on Tax Matters Act of 2009").”

This means that taxpayers and auditors have to set aside some space for ten years’ worth of records.  And like the sword ordered by Dionysius to hang over Damocles, the records will continue to hang over taxpayers until the ten years lapse.

Cicero is said to have once remarked “Does not Dionysius seem to have made it sufficiently clear that there can be nothing happy for the person over whom some fear always looms?”  The BIR does not seem to care about that lesson.