Philippine Salt Industry Development Act Signed Into Law
On 11 March 2024, President Ferdinand R. Marcos Jr. signed Republic Act No. 11985 or the “Philippine Salt Industry Development Act” (“PSIDA Law“) with the goal of reviving the country’s salt industry. The PSIDA Law is in line with the policy of the State to preserve, protect, and rehabilitate the natural environment in the actualisation of developmental policies.
Congress proposed the law amid concerns that despite the Philippines being an archipelagic country, over 90% of the country’s salt requirements are being imported mainly from Australia and China annually. This may be attributed to the passage of Republic Act No. 8172, or “Act for Salt Iodization Nationwide” (“ASIN Law“). Under the ASIN Law, all locally produced salt is required to be iodised. This adversely affected the local production of sea salt leading to increased reliance on imports.
With the enactment of the PSIDA Law, the effects in the implementation of ASIN Law will be addressed. The Government anticipates an increase in the production of salt, and the attainment of the goal to become salt-sufficient and be the net exporter of salt. Further, the revival of the salt industry would create opportunities for thousands of new jobs, particularly in the rural and coastal communities.
One of the pertinent provisions of the PSIDA Law is the mandate for the establishment of a Philippine Salt Industry Roadmap (“Salt Roadmap“) to focus on the revitalisation and modernisation of the salt industry. The Salt Roadmap includes programmes, projects, and interventions for the development and management, research, processing, utilisation, business modernisation, and commercialisation of Philippine salt. Further, the PSIDA Law also provides for the creation of the Philippine Salt Industry Development Council to ensure the unified and integrated implementation of the Salt Roadmap and fast-track the modernisation and industrialisation of the Philippine salt industry.
AML Council Proposes Two Actions to Have Philippines Removed from Global Money Laundering 'Grey List'
On 7 March 2024, the Anti-Money Laundering Council (“AMLC“) proposed two regulatory actions for the implementing rules and regulations of the Anti-Money Laundering Act (“AMLA“) and the Terrorism Financing Prevention and Suppression Act of 2012. These are intended to address the remaining strategic deficiencies noted in the Mutual Evaluation Reports (“MER“) pertaining to the Philippines’ Anti-Money Laundering and Countering the Financing of Terrorism framework, and thereby remove the Philippines from the “Jurisdictions under Increased Monitoring”, commonly known as the grey list of global money laundering for 2024. The Philippines has been included in the Financial Action Task Force’s (“FATF“) grey list due to these deficiencies noted in the MER.
To comply with the latest FATF standards, address the operational concerns of AMLC, and further clarify the provisions of the AMLA to assist covered persons and government agencies in effectively implementing the law, AMLC will implement changes including:
- adopting an effective risk-based supervision of Non-Financial Businesses and professionals (NFBPs);
- mitigating risk associated with casino junkets;
- enhancing and streamlining access to beneficial ownership information;
- demonstrating an increase in the money laundering and terrorism financing investigations and prosecutions; and
- ensuring cross-border measures in all entry points across the country, including seaports and airports.
PCC Increases Thresholds for Merger Notifications
The Philippine Competition Commission (“PCC“) has raised the merger notification thresholds for transactions that will undergo mandatory merger review. Beginning 1 March 2024, mergers and acquisitions that exceed both (i) the size of party (“SOP“) threshold of PhP7.8 billion and (ii) the size of transaction (“SOT“) threshold of PhP3.2 billion must be notified to PCC before the merger transaction can proceed. SOP pertains to the aggregate value of assets or revenues of the ultimate parent entity of either party involved in the transaction, while SOT refers to the total value of assets or revenues of the acquired entity and all its controlled entities.
PCC annually adjusts its thresholds following Memorandum Circular No. 18-001 which is based on the official estimate of the nominal Gross Domestic Product growth of the previous year. The increase in thresholds does not affect mergers or acquisitions pending review by PCC, notifications filed before 1 March 2024, and transactions which are already the subject of a decision by PCC.
Securities and Exchange Commission Issues Philippine Sustainable Finance Taxonomy Guidelines
On 23 February 2024, the Securities and Exchange Commission (“SEC“) issued Memorandum Circular No. 5, series of 2024 or the Philippine Sustainable Finance Taxonomy Guidelines (“Guidelines“). The primary goal of the Guidelines is to channel capital towards economic endeavors that further sustainability goals, such as lowering greenhouse gas emissions and bolstering climate resilience. Additionally, it fosters transparency and reliability by reducing the likelihood of greenwashing and facilitates a fair transition to a sustainable economy.
The Guidelines uses the traffic light approach such as “green”, “amber”, or “red” in classifying an activity, as follows:
- A green activity is one that makes a substantial contribution to an Environmental Objective (“EO“) and meets the Essential Criteria of Do No Significant Harm (“DNSH“) and Minimum Social Safeguards (“MSS“).
- An amber activity is one that makes a substantial contribution to an EO and meets the Essential Criteria of DNSH and MSS (i.e. a green activity), but causes significant harm to another EO. Such harm must be able to be remediated within five years, or within less than 10 years as verified by an independent party.
- A red activity is one that does not serve any EO or meet the Essential Criteria. This does not imply that the activity is unsustainable. Rather, it does not meet the higher sustainability ambition of the Guidelines, nor pass the DNSH or MSS tests.
The Guidelines also formally define sustainable finance in the Philippines as any form of financial product or service which integrates environmental, social and governance criteria into business decisions that support economic growth and provide lasting benefit for both clients and society while reducing pressures on the environment. Sustainable finance includes, as a subset, green finance which is designed to facilitate the flow of funds towards green economic activities and climate change mitigation and adaptation projects.
Department of Labor and Employment Issues Revised Implementing Rules and Regulations of Republic Act No. 11360
On 1 February 2024, the Department of Labor and Employment (“DOLE“) issued Department Order No. 242, series of 2024 (“Order“) which provides for the revised implementing rules and regulations of Article 96 of the Labor Code of the Philippines as amended by Republic Act No. 11360, entitled “An Act Providing that Service Charges Collected by Hotels, Restaurants and Other Similar Establishments be Distributed in Full to All Covered Employees” (“RA 11360“).
The Order covers all employees except managerial employees “regardless of their position, designations, or employment status, and irrespective of the method by which their wages are paid”. Managerial employees are defined by the Order as “any person vested with powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions.” What this means is that covered employees (except managerial employees) are now entitled to receive the full amount of the service charges contemplated in RA 11360.
The Order also provides for the non-diminution of benefits. This means that the new rules on will not diminish the existing benefits of covered employees under present laws, company policies, and collective bargaining agreements.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
