Asia economic losses from calamities estimated at $675B
A UNITED NATIONS (UN) agency estimated the annual economic losses in Asia and the Pacific from disasters at more than half a trillion dollars, and urged countries to invest in prevention and resiliency measures to manage the risk because disasters are getting worse.
In the Asia-Pacific Disaster Report 2019 launched Thursday, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) reported that recent disasters in Asia and the Pacific have been stronger than usual, leaving countries unprepared for the impact. The disasters include earthquakes, tropical cyclones, floods, tsunamis, and drought.
“The annual economic loss for Asia and the Pacific is now $675 billion, or around 2.4% of the region’s GDP, of which $405 billion or 60% are drought-related agricultural losses, impacting the rural poor disproportionately,” UN ESCAP said in a statement Thursday.
The report said losses have been rising since there are more physical assets at risk, noting that disaster risks are outpacing economic growth in Asia and the Pacific. The increase in the number of disasters is attributed to climate change, to which 96% of people living in the region are exposed.
Risks are also becoming more “complex” than before, making it hard for countries in the region to determine what kind of preparation is needed.
The Philippines’ multi-hazard average annual loss (AAL) was estimated at $20 billion. The total proportion of the Philippine population living in high-risk areas is 75.8%.
ESCAP also noted that disasters worsen inequality and poverty in the region. The report also encouraged countries to invest in disaster resilience and enact the needed social policies in order to keep poverty from worsening due to disasters.
“With disaster risk, 119 million people are projected to be living in extreme poverty in these countries in 2030. However, investing in line with global averages in education, health and social protection will bring this number down, to 80 million, 69 million and 53 million, respectively,” the report said.
The Philippines needs to invest an additional $10 billion per year in order to get ahead of the disaster risk.
ESCAP said additional investments will be more beneficial for society if policy makers are capable of assessing disaster risks on individual sectors. UNESCAP added, “the benefits of increased investment can only be amplified when governments are more risk-informed in their decision-making. This requires a comprehensive portfolio of sectoral investments combined with interventions for climate change adaptation and disaster risk reduction.” — Gillian M. Cortez
Economic team sees exporting nations faring worse than PHL in recession
ECONOMIC managers said the Philippines will not be significantly affected by the rising possibility of global recession since the country is not export-driven.
“With the increasing prospect of recession in the global economy, this is a real threat but our protection is that the Philippine economy is more internally demand-driven rather than externaly-demand driven,” National Economic Development Authority (NEDA) Secretary Ernesto M. Pernia said at the 2020 budget briefing conducted by the Development Budget Coordination Committee (DBCC)
NEDA, which Mr. Pernia heads, is among the DBCC members along with the Department of Finance (DoF), and Department of Budget and Management (DBM), setting official macroeconomic targets and assumptions for the government.
Finance Undersecretary and chief economist Gil S. Beltran added that Overseas Filipino Workers (OFWs) are not expected to be affected by a global slowdown since they provide “essential services” such as health, education, and domestic services.
“That’s what the numbers say, na magkakaroon ng (that there will be a) recession. The good thing about the Philippine economy is that we are not export-led, we are domestic-led,” Mr. Beltran told reporters on the sidelines of the event.
Analysts are seeing signs the US is heading for a downturn after a brief inversion in the yield curve earlier this month, a classic recession signal. The last inverted yield curve came in June 2007 when the US sub-prime mortgage crisis was breaking.
An inversion takes place when short-term bond rates are higher than long-term rates, implying greater immediate risk. The typical bond rate structure assigns higher risk to longer terms, due to the increased uncertainty inherent in longer-term debt.
The two officials also said the Philipines will be the least affected in the Association of Southeast Asian Nations (ASEAN), the leading economies of which are more export-oriented.
“We do not depend very much on exports as do other ASEAN countries,” Mr. Pernia said.
“We are not a high-flying export economy, alam mo kung sino ang worst affected? (Do you want to know who will be the worst-affected?) Korea, Singapore, Hong Kong, Thailand, ‘yan ang mga affected (those will be affected), they will collapse,” Mr. Beltran said.
However, he added that the Philippines may accommodate a wider budget deficit of up to 5% of Gross Domestic Product if the threat of a global recession requires economic stimulus.
“A 3% (deficit) is good enough, we just need to do more. [But] we won’t be affected,” Mr. Beltran said, adding: “We had 5% (deficit) in the past; during a period of crisis, the economy allows 5%,” he said.
The DBCC set a target in its July meeting of a budget deficit of up to 3.2% of GDP between 2020 and 2022.
Meanwhile, they assured that the government is speeding up infrastructure spending to stimulate economic growth and act as a buffer against the impact of a global slowdown.
“If we just do… massive infrastructure spending, which we also encourage the private sector to increase capital formation, then I think we probably be relatively unscathed at least this year in terms of possible global economic recession,” Mr. Pernia said.
Data from DBM indicates that catch-up spending by the government is currently under way following the four-month delay in passing the 2019 budget.
The government has a recorded a budget utilization rate of 93% on notice of cash allocations (NCA), using P1.153 trillion out of the P1.244 trillion cash worth of cash allocated as of July. — Beatrice M. Laforga
Clark Freeport takes in 54 new locators in first seven months
THE Clark Freeport Zone said it added 54 new locators in the first seven months of 2019, generating 5,295 new jobs.
Clark Development Corp. (CDC) Vice President for Business Enhancement and Business Development Group Evangeline G. Tejada said locators in the economic zone now total 1,092.
“The increase in numbers of locators and workers in Clark can be attributed to the sound economic policy (in place) since 2016,” CDC said in a statement.
Aside from its fiscal and non-fiscal incentives, several infrastructure projects are being completed in Clark Freeport Zone, which has attracted businesses, and property developers fleeing the congestion in Metro Manila.
These include the new terminal for Clark International Airport, due to be completed in 2020; the Subic-Clark Railway project, to be completed by 2022; and the 147-kilometer North-South Commuter Railway which will have three segments, a 56-kilometer line from Calamba to Tutuban, a 38-kilometer line from Tutuban to Malolos, and a 53-kilometer line from Malolos to Clark. It will be finished by 2023.
The top employers in the zone are industrial firms, followed by the Information and Communication Technology (ICT) and estate developers. The development of the National Government Administrative Center is also expected to expand the number of public jobs in Clark.
Phase 1A of New Clark City, the National Government Administrative Center, is 90% complete after more than a year of construction. The center houses sports facilities which will be used for the 30th Southeast Asian Games in November, including a 20,000-capacity stadium; 2,000-seater aquatics center; and an Athletes’ Village. — Vincent Mariel P. Galang
Taiwan firms keen to strike up distribution deals with local firms
TAIWAN’s trade office said its companies are hoping to bring innovative products to the Philippines via tie-ups with domestic distributors.
“I believe the products we offer and showcase in this event fit the needs of Filipinos, (who) attach high importance to family life. That’s why I’m quite optimistic about the results of this exhibit,” Chang Wen Chong, director of the Taipei Economic and Cultural Office (TECO), told reporters during Thursday’s “Wow! Taiwan” exhibit in Makati City.
Mr. Chong said the Philippines has a young and dynamic population that is open to innovative products, including food, cosmetics, fashion, technology, and modern household products from Taiwan.
“They are also interested in Taiwanese culture, as seen in the huge numbers of Filipino visitors flocking to Taiwan. In fact, the Philippines had the most number of arrivals from Southeast Asia in Taiwan last year. Currently, the potential is high in the Filipino market because the younger generation has more disposable income and are open to new and unique products,” he said.
The exhibit was brought to the Philippines by Taiwan’s Bureau of Foreign Trade, Ministry of Economic Affairs, and Commerce Development Research Institute (CDRI).
Taiwan brands featured in the event were XYZprinting, Inc., Brinno, Inc., HiMirror Mini, Master Mi, Carnation, Yumark, FECA, Kid2Youth, Washcan, Jye Li An, Bung Cheng, Shuter Enterprise Co. Ltd., H&J Food, and Chung-Hsiang Foods.
Tammy Ting, department manager at CDRI, said through the event, Taiwan’s entrepreneurs are aiming for long-term partnerships with local partners while opening their brands to new markets.
She said she hopes that the exhibit will result in “cooperation” between Taiwanese manufacturers and Philippine buyers.
“The outcome will slowly reveal itself as time passes,” she said, when asked about she would quantify the expected outcome of the exhibit.
Among Taiwan’s innovative brands is HiMirror, which is selling a “smart mirror” that uses skin analysis technology that allows it to track progress of treatments, and provide recommendations based on skin condition. It analyzes skin condition through just a photo.
Another brand, Brinno, offers a time-lapse camera that delivers “superior” full high definition HDR (high dynamic range) images. The company started its design business in 2003 and claims to be a first mover in time-lapse photography. Brinno develops hardware and software solutions, and puts them in one digital device. — Victor V. Saulon
PHL, Germany agree to set up Joint Economic Commission
THE Philippines and Germany have signed a joint declaration of intent to set up a Joint Economic Commission (JEC), a platform for expanding bilateral trade and investments, a German chamber of commerce official said.
“We are enthusiastic about Philippine-German trade relations through setting up a JEC as it will strengthen more economic partnerships across many sectors,” said Tristan Arwen Loveres, president of the German-Philippine Chamber of Commerce and Industry (GPCCI).
He said the signing of the joint declaration of intent “is a remarkable signal on the partnership and we are looking forward to (via) the JEC.”
Trade Undersecretary and Board of Investment Managing Head Ceferino S. Rodolfo and German Parliamentary State Secretary Thomas Bareifl signed the declaration on Aug. 20 at the Federal Ministry for Economic Affairs and Energy in Berlin.
GPCCI said Germany is the biggest trading partner of the Philippines in the European Union and its 11th largest trading partner with a total trade of $7.4 billion in 2018. — Victor V. Saulon
Romblon solar facility to start operations in Sept.
SUWECO Tablas Energy Corp. (STEC) expects its P550-million solar power plant in Tablas Island, Romblon to start commercial operations by September, the company said as it launched on Wednesday a hybrid solar-diesel microgrid with a battery facility.
“An estimated P180 million per year will be saved from the government subsidy for universal charge for missionary electrification,” STEC said in a statement.
The savings also come from avoiding the use of 3 million liters of fossil fuel and reduced carbon emissions of 6.5 million kilograms per year, the company said.
STEC claims to be the country’s first and largest hybrid solar-diesel microgrid with battery facility. Built on a 9-hectare property in Tablas, it is capable of producing 7.5-megawatts of electricity at peak.
The clean and reliable energy for the entire island is enough to support the daytime power requirements of the area’s 43,400 households.
“Excess solar power will be stored in the plant’s batteries and will be used to maintain a reliable system while diesel generators will produce electricity at night,” the company said.
STEC said the households used to experience daily power outages because of the limited supply from state-owned National Power Corp.’ small power utilities group, or SPUG, which is not connected to the national grid and depends on diesel-power sets.
The facility’s launch comes after President Rodrigo R. Duterte in July called on the Department of Energy to ease the development of renewable energy resources to cut the country’s reliance on traditional energy sources.
“We recognize the urgent need to ensure the sustainability and availability of resources and the development of alternative ones. In this regard, I trust that Secretary (Alfonso G.) Cusi shall fast-track the development of renewable energy sources, and reduce dependence on the traditional energy sources such as coal,” he said in his State of the Nation Address in July.
STEC is an affiliate of Sunwest Water and Electric Co., Inc. (Suweco), a pioneer in the implementation of hybrid technology in the Philippines. It operates in Catanduanes, Sorsogon, Romblon and Antique.
Suweco, which operates several mini-hydro and diesel power plants, is a member of the Sunwest Group Holding Co. Inc., a business group founded by Elizaldy S. Co, a Legazpi City-based entrepreneur and businessman. — Victor V. Saulon
Bill proposes health warnings for alcoholic beverages
A LEGISLATOR has filed a bill proposing health warnings on the packaging of alcoholic beverages and in restaurant menus offering such drinks.
Muntinlupa Rep. Rozzano Rufino B. Biazon filed House Bill 4059 which will require health warnings on such products, as well as menus printed by establishments offering such beverages.
Mr. Biazon was also one of the authors of the Tobacco Regulation Act in the 12th Congress which provided that health warnings must be put to packaging of tobacco products.
“Alcohol is also addicting, with alcoholism plaguing society in the same way as narcotics addiction. Both are (forms of) substance abuse which lead to disease and mental health problems,” he said.
He added, “But unlike cigarettes which have an effect mainly on the user and to those in close proximity, alcohol can cause harm or even death to others because of its effect on the person consuming the substance.”
The bill also requires establishments that offer alcoholic beverages to include health warnings where they appear on the menu.
Violations face a potential fine of P1 million on the first offense, P2 million for the second offense, and P3 million and revocation of license on the third offense. — Vince Angelo C. Ferreras
Senator backs cadet police training as part of mandatory ROTC
A LEGISLATOR said Thursday that he supports cadet training for the police service to be offered to Senior High School (SHS) students undergoing the mandatory Reserve Officer Training Corps (ROTC) program.
The Senate on Thursday re-opened discussions on the proposed mandatory ROTC program for Grades 11 and 12. Senator Francis N. Tolentino said that as part of the program, basic training in police missions such a law enforcement, disaster preparedness, and traffic management should also be included.
The senator cited Malaysia and some cities in the US, whose police forces have cadet programs for basic traffic and disaster management.
“I would want you to look at the examples of Malaysia and the Los Angeles Police. In the Los Angeles Police, they have the Los Angeles Police Cadets (who are in) Senior High School. Sa Malaysia, ang pinagmamalaki nila (In Malaysia, they have) the Malaysia Police Youth Corps, which is similar to the ROTC,” he said during the committee hearing.
Mr. Tolentino filed Senate Bill No. 212 on July 2, which calls for the mandatory basic military and police training for SHS student in public and private schools.
On the other hand, Senator Sherwin T. Gatchalian, an advocate of the mandatory ROTC, said that an ROTC program for SHS students nationwide will require a budget of P38 billion annually.
“If we cannot guarantee the P38 billion and we implement this haphazardly, we will not see a new and improved ROTC,” he said during the hearing.
Mr. Gatchalian refiled SB No. 177, which also calls for mandatory ROTC for SHS students, with the additional focus on disaster preparedness.
Last year, President Rodrigo R. Duterte certified as urgent a bill requiring high school students to undergo military training. — Gillian M. Cortez
Globe says cancer fears among factors delaying cell site rollout
GLOBE Telecom Inc. said it has tapped medical experts to address fears of cancer risk from mobile phone use and proximity to cell towers, which it cited as a factor in delaying the construction of cell sites.
In a statement on Thursday, Globe cited Philippine Radiology Oncology Society (PROS) Vice-President Johanna Cañal said that based on studies conducted overseas, there are “no adverse health effects” from cellphones or cell towers radiation.
“(T)here has been no proven causality between cellphone use and cancer induction. What does the US FDA say about this? In 2018, the current safety limit is set to include a 50-fold safety margin from observed effect on radiation. How about cell towers and base stations? The American Cancer Society says at ground level, near typical base stations, the amount of RF energy is thousands of times less than the limits for safe exposure,” she said.
Citing data from the World Health Organization, Globe reported that cellphones give off low levels of radio frequency, categorized by WHO as RF Classification 2B.
Globe Director for Technology Strategy & Service Integration Gerhard P. Tan said he hopes the campaign will aid in the establishment of more cell sites amid resistance from home owners associations (HOAs).
“We are urging everyone who are here to spread awareness that RF electromagnetic radiation coming from cell sites is not cancerous. Debunking this health myth will help us hasten the build of more cell sites in the Philippines, which in effect, will bring the country closer to first world internet connectivity,” he said in a statement. — Gillian M. Cortez
Ecuador fights banana fungus threatening banana crop
NEW YORK — The detection of a banana-killing fungus in neighboring Colombia is setting off alarm bells in Ecuador, the world’s biggest exporter of Americans’ favorite fruit.
Growers in Ecuador, where bananas generate $2.6 billion in exports and 2.5 million jobs, are battling to prevent Fusarium TR4, also known as “Panama Disease” or “Fusarium wilt.” Some farms are disinfecting shoes, tools and vehicles and have set up unique access paths for workers. Others are considering putting up fences to isolate crops, the association of banana exporters says.
Ecuador has more than 7,000 growers, many with very small plots that sometimes share water supplies, leaving areas vulnerable to infestation. The fungus’ arrival could be “catastrophic,” said Marianela Ubilla, vice president of the association.
“This is very worrisome to us because the fungus is moving about 100 kilometers (62 miles) a year,” and has traveled to the Middle East, Asia and Australia, Ubilla said by telephone from Quito.
While Ecuador began preventative measures even before Colombia detected the fungus earlier this month in 175 hectares (432 acres) near the border with Venezuela, tensions are now running higher in the region. Colombia authorities have stepped up surveillance to try to contain the disease.
Fusarium TR4 can be transmitted through planting materials or infected soil particles carried by clothes, water or vehicles. It can remain dormant in soil for decades. Smuggling plants across borders is another way of spreading the disease. While the fruit is safe to eat, there’s no treatment for plants, which wither and die.
Colombian Agriculture Minister Andres Valencia Pinzon met earlier this month in Quito with representatives of the 15 main exporting countries to present steps his country has taken. The ministry is also considering offering funding for smaller producers as part of efforts to have all growers meet export standards.
In Guatemala, the top supplier to the US, authorities are tightening customs on goods as well as setting up airport checkpoints to scan for people arriving from countries suspected of having the disease.
The menace comes as Latin American farmers face low prices for some of the regions’ other top farm exports, including sugar and coffee. The Philippines, Costa Rica, Colombia and Guatemala complete the list of five biggest banana shippers. Latin America accounts for 25% of world banana production and 80% of exports.
The region’s efforts to prevent the spread of the fungus should be of keen interest to U.S. consumers, who gobble down more than 28 pounds of bananas each a year on average, according to Rabobank, citing 2017 data, the most recent.
U.S. import prices climbed to multi-year highs early last year amid weather and disease disruptions. With most supply coming from one variety, the export market is vulnerable, said Rabobank analyst Roland Fumasi.
“Bananas are such a global staple in the world diet that every time there’s a major disruption, or a disease threat, there’s got to be concern,” Mr. Fumasi said by telephone from Fresno, California. — Bloomberg
DBM seeking EO extending validity of capital outlays after delayed budget
THE Department of Budget Management (DBM) said it proposed that the President issue an executive order extending the deadline to complete capital outlay items to make up for the delay in approval of the 2019 national budget.
“Our proposed EO (executive order) is only for extension for (capital outlay) payments,” DBM Acting Secretary Wendel E. Avisado said during the Development Budget Coordination Committee (DBCC) 2020 budget briefing at the House of Representatives Thursday.
Mr. Avisado said the request for an executive order is being reviewed by the Office of the President.
He also clarified that the extension request was only for the payments and not the extension on capital expenditure which he said will require Congressional approval.
“Appropriations for infrastructure, capital outlays, including subsidies to GOCCs for infrastructure projects shall be valid for obligation until the end of this year or Dec. 31, 2019, in accordance with section 65 of the General Appropriations Act of 2019, while the completion of construction, inspection and payments shall not be made later than Dec. 31 of next year.”
Meanwhile, Antique Rep. Loren B. Legarda said the delay in passing the budget caused the non-release of some appropriations and that their validity should be extended until next year.
Ms. Legarda’s House joint resolution no. 9 seeks to amend Section 65 of Republic Act No. 11260 or the General Appropriations Act of Fiscal Year 2019, to extend the validity of maintenance and other operating expenses and capital outlay appropriations until Dec. 31, 2020.
Infrastructure and other capital outlay disbursements fell by 11.7% year on year to P311.4 billion in the first half, missing a P392.9-billion target for that period by a fifth.
The government operated on a reenacted 2018 budget until mid-April when the President signed this year’s P3.662-trillion national budget. He also vetoed P95.3 billion worth of spending.
Economists and economic managers have blamed the budget impasse for the slower-than-expected 5.5% economic growth in the second quarter.
The economy will have to grow an average of 6.4% in the second semester to hit the lower end of the 7-9% growth target for 2019. — Beatrice M. Laforga