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Is this the right thing to do?
“The Aquino administration has revived plans to sell Duty Free stores as part of efforts to streamline the bureaucracy by unloading underperforming assets,” reports Paolo G. Montecillo in Philippine Daily Inquirer.
The report noted: “While privatizing Duty Free Philippines Corp. (DFPC) faces several legal and financial constraints, it has the support of the finance and tourism departments as well as President Aquino’s approval.”
The report explained: “As an attached agency to the Department of Tourism (DOT), Duty Free runs a chain of retail stores selling tax-free goods at international airports in the country. These stores cater to people entering and leaving the Philippines. DFPC also operates Fiesta Mall, a retail facility that targets balikbayans or new arrivals to the country.”
The plan for DFPC’s privatization dates to as early as the administration of former President Estrada.
DOT Sec. Ramon Jimenez Jr. noted, though, that there were “issues that might hinder DFPC’s sale.” He cited the following:
1. The special authority DFPC enjoys that allows the sale of untaxed goods. The report indicated that “a law might be passed to transfer this privilege to whichever company agrees to acquire DFPC.”
2. DFPC owes PHP1.45 billion in income taxes to the Bureau of Internal Revenue (BIR). As the report pointed out, this tax liability was upheld by the Supreme Court last October and brings DFPC’s net asset value to “zero or even negative.”
