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Current demographic trends do not justify reduction of PhilHealth premiums

The recent announcement of the Philippine Health Insurance Corp.’s (PhilHealth) P463.7-billion cumulative reserve fund in 2023, with an annual unutilized fund of P89 billion in 2024, has led to calls for premium reductions. On Aug. 27, as a response, the Senate passed SB 2620, which lowers the PhilHealth premium to 3.25% starting in 2025 and increases it to 4% in 2028. This is lower than the original 5% rate stipulated in the Universal Health Care (UHC) law.

While possible reasons include a lower utilization rate after the pandemic, and the slow increase of benefit payments relative to the rise in premium collections, we need to consider that demographic factors also play a significant role.
The Philippines is undergoing a demographic transition characterized by an increasing working-age population, declining fertility rates, and improving life expectancy, all affecting healthcare utilization and financial reserves. This article explores the demographic factors in detail and their impact on the growing PhilHealth reserves.

The declining fertility rate (1.9 births per woman in the last National Demographic and Health Survey) and growing working-age population (aged 15 to 64) create a potential for a “demographic dividend.” This means our health system will have a larger pool of contributors and relatively fewer dependents.

This demographic shift presents both a challenge and a golden opportunity for our healthcare system, particularly PhilHealth. More workers mean more premium contributions, as shown in Table 1, where contributions surged from P85 billion in 2020 to P158 billion in 2023. This will still be true even without premium rate increases. Fewer dependents translate to lower per capita health expenditures vis-a-vis insurance contributions, as health spending is typically highest among the very young and older people.

However, the demographic dividend is not automatic, and forever. Projections in Figure 1 indicate that by 2028, when retaining a 4% premium rate, the surplus will dwindle as our population ages and healthcare costs inevitably rise.

This is further evidenced by the increasing per capita benefit payment, particularly among older age groups, as seen in Figure 2.

SEIZING THE MOMENT: INVESTING IN THE FUTURE
Reducing premiums now might not be beneficial in the long term for several reasons:

• High out-of-pocket expenses: Data from the Philippine National Health Accounts show that Filipino households still shoulder 44.4% of their healthcare costs out-of-pocket. The Longitudinal Study of Ageing and Health in the Philippines found that 67% of older people’s healthcare costs are out-of-pocket, shouldered mostly by their family, despite health insurance coverage. Reducing premiums without addressing this issue can worsen financial burdens on individuals and families facing health crises.

• Opportunity for long-term investment: The current surplus presents a rare opportunity to invest in expanding PhilHealth’s coverage and improving the quality of care. This investment will yield long-term benefits for both the health and economic well-being of the population.

• Preparation for population aging: Lowering premiums could leave the system unprepared for the inevitable increase in healthcare needs as the population ages.

To maximize the benefits of the increased premium collections, we must do the following:

a. Invest the surplus in expanding PhilHealth packages:

• Improve cost coverage to prevent catastrophic health expenditures for individuals and families.

• Invest in high-return-on-investment (ROI) health services (e.g., nutrition, maternal health) that yield strong economic returns throughout the life course.

b. Prepare for the eventual population aging:

• Review premium schemes, especially focusing on making them more progressive to ensure equity and sustainability.

• Explore other sources of financing for health, such as sin taxes or dedicated health funds.

• Increase the efficiency of PhilHealth funds by reducing fraud, covering cost-effective interventions, and focusing on primary and preventive care.

To end, rather than reducing premiums, PhilHealth can expedite the expansion of its benefits package while remaining prudent in its utilization. While it may take time to have the health system to fully implement UHC, some low-hanging fruits can be considered:

• Expedite the roll-out of the expanded primary care benefit package (Konsulta).

• Cover for the provision of discharge medicines that can be integrated into the inpatient benefit packages. While the goal is to cover outpatient medicines eventually, this is easier to implement in the short term as it will not require any additional capital investment from providers as many already licensed hospitals should have their hospital pharmacies address this.

• Re-cost existing high-burden packages. In the current financing scheme, the support cost of PhilHealth for different services varies depending on the case rates. While PhilHealth is in the process of implementing new provider payment mechanisms, in the short term, it can look into making sure its current case rates cover the full cost of care.

References:

Boerma, T., Eozenou, P., Evans, D. B., Evans, T., & Kieny, M. P. (2020). Universal health coverage: Now is the time to invest in health systems. BMC Public Health, 20(1).  https://tinyurl.com/2dzr8td8

BusinessWorld. (2024, May 15). “PhilHealth coverage vs. savings hit.” BusinessWorld Online.  https://tinyurl.com/249vrf3r

Philippine Statistics Authority. (2024). Philippine population projected to be around 138.67 million in 2055 under scenario 2. https://tinyurl.com/2244npdy

United Nations Population Fund. (2015). Demographic Sweet Spot and Dividend in the Philippines. https://philippines.unfpa.org/sites/default/files/pub-pdf/Demographic%20Sweet%20Spot%20and%20Dividend%20in%20the%20%20Philippines_FINAL_DRAFT_Ver4_OCT2015-withcover_0.pdf

United Nations Population Fund. (2021). A Life Cycle Approach for Transforming Economies. https://asiapacific.unfpa.org/sites/default/files/pub-pdf/210927_unfpa_a_life_cycle_approach_layout.pdf

 

Dr. Charl Andrew Bautista is a medical doctor working in public health, population, and development. This paper was written as part of his previous course requirements at the University of the Philippines Population Institute.

Dr. Elma Laguna is the current director of the University of the Philippines Population Institute. She is also an associate professor of Demography.

Dr. Michael Ralph Abrigo is a senior research fellow at the Philippine Institute for Development Studies (PIDS).

Chilean author Isabel Allende joins Barbie doll collection

BUENOS AIRES — Chilean author Isabel Allende, one of the world’s most widely read Spanish-language writers, will be immortalized in recycled plastic with her own Barbie doll, alongside her dog Perla and a miniature replica of her first novel.

US toymaker Mattel, Inc. is releasing the doll, clothed in a red dress with large earrings, as part of “Inspiring Women” series, which has already featured poet Maya Angelou, journalist Ida B. Wells, and singer Celia Cruz.

“I celebrate the Barbie brand’s initiative to inspire the next generation with the stories of unsung heroes,” Allende said in a statement. “I want kids to dream big.”

Allende’s works often blend historical events with magic and fantasy. Her first novel, The House of the Spirits, published in 1982, was an instant bestseller. She has since published dozens more books, including memoirs and short story collections, which have been translated into over 40 languages.

Allende moved to Venezuela in 1973 when Chilean President Salvador Allende, her father’s cousin, was overthrown in a coup led by General Augusto Pinochet. Also a human rights activist and teacher of literature, Allende has lived in the US for over 30 years.

“Stories have incredible power,” Allende said. “They challenge our minds and touch our hearts, they connect us to other people and teach us that we are not alone in life’s journey.”

The writer will also feature on Barbie’s first podcast series, launching on Friday. Other guests include Katya Echazarreta, the first Mexican-born woman in space, US figure skater Kristi Yamaguchi, and dancer Debbie Allen.

Barbie has in recent years expanded its collection to cover various skin tones and body types. The 2023 Barbie movie became the highest-grossing film ever released by Warner Bros. and added a new emotional depth to a brand that has faced criticisms for promoting unrealistic beauty standards. — Reuters

Isuzu PHL donates auto equipment to school

From left are Jacobo Z. Gonzales Memorial School for Arts and Trade (JZGMSAT) Vocational School Administrator III Dr. Angelica Gonzales, Isuzu Philippines Corp. (IPC) President Tetsuya Fujita, TESDA IV-A Regional Director Archie Grande, and IPC Asst. Vice-President for Administration Imelda Bernas. — PHOTO FROM ISUZU PHILIPPINES CORP.

ISUZU PHILIPPINES CORP. (IPC) recently bolstered its longstanding partnership with the Jacobo Z. Gonzales Memorial School for Arts and Trade (JZGMSAT) by donating “industry-standard equipment” for the school’s automotive service shop facility.

The turnover of donations was led by IPC President Tetsuya Fujita. The equipment includes a new tire changer, wheel balancer, and tools drawer — to complete the facility’s complement. The donations are part of an ongoing corporate social responsibility (CSR) initiative aimed at improving the competency of future service technicians in the country.

“This collaboration aligns with our commitment to corporate social responsibility and our vision of fostering technical education and skills development in the automotive sector. It’s fulfilling to see the positive impact our contributions have made, and we are motivated to continue supporting educational initiatives that align with our values,” said Mr. Fujita.

Since 2017, IPC has been “a dedicated partner” to JZGMSAT. It has provided equipment such as computers, mock engines, and automotive lifters. The company has also facilitated specialized training in diesel technology, sharing with the students Isuzu’s expertise with hands-on experience using advanced automotive equipment. These contributions are said to have significantly enhanced the school’s educational offerings, giving its students a competitive edge in the automotive industry.

Meanwhile, TESDA IV-A Regional Director Archie Grande stressed the importance of partnering with companies sharing the same values, “Our success is deeply intertwined with the support and collaboration of our industry partners. Companies like Isuzu Philippines, who understand the value of investing in human capital are crucial in bridging the gap between education and industry needs,” he said.

Looking ahead, IPC plans to expand its partnerships with more educational institutions across the country. The company believes that by investing in education and skill development, it can create lasting positive impacts on society and contribute to the overall progress of the automotive industry in the Philippines.

For more information, visit www.isuzuphil.com or follow Isuzu Philippines on Facebook.

BSP net income surges at end-June on higher interest earnings

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) saw its net income surge in the first half amid higher interest earnings, preliminary data showed.

The central bank’s net profit surged by 330.51% to P85.50 billion in the six months ending June from P19.86 billion a year earlier, according to data posted on its website.

Revenues went up by 56.9% year on year to P164.08 billion from P104.58 billion.

Broken down, interest income made up bulk of the BSP’s revenues during the first semester at P119.76 billion, rising by 28.21% year on year from P93.41 billion.

Miscellaneous income, which includes fees, penalties and other operating income, stood at P44.32 billion at end-June, up by 296.78% from P11.17 billion a year earlier.

On the other hand, the BSP’s expenses declined by 8.9% year on year to P106.13 billion in the first half.

Broken down, other expenses, which include net trading losses, fell by 40.02% to P21.82 billion from P36.38 billion. Meanwhile, interest expenses rose by 5.19% year on year to P84.31 billion as of June.

This brought the central bank’s net income before foreign exchange (FX) gains, tax, and capital reserves to P57.95 billion in the first semester, a turnaround from the P11.94-billion loss it posted in the comparable year-ago period.

Its bottom-line was boosted by a P27.56-billion net FX gain from its foreign currency-denominated transactions in the period.

Meanwhile, separate BSP data showed that its assets went up by 8% to P7.874 trillion at end-June from P7.294 trillion a year ago.

International reserves made up bulk of its assets at P6.13 trillion, up from P5.46 trillion a year prior.

On the other hand, the BSP’s liabilities climbed by 7.6% to P7.667 trillion in the first half from P7.126 trillion.

Currency in circulation stood at P2.31 trillion as of June, while deposits with the central bank were at P2.599 trillion, the data showed.

The central bank’s net worth stood at P207.73 billion as of June, up 24.14% from P167.34 billion a year earlier. — AMCS

Converge plans annual data center expansion

UY-LED Converge ICT Solutions, Inc. plans to build at least one to two data centers annually, dedicated solely to the company’s internal services.

“The way I see it, with digital transformation, we should set up at least one to two data centers every year,” Dennis Anthony H. Uy, Converge chief executive officer and cofounder, told reporters on Thursday last week.

“Next, (we will focus on) Cebu and Davao — the big cities,” he said, planning to invest P6 billion to P7 billion annually in expanding data center capacity.

Converge has announced plans to open two new data centers in 2025.

These include the Pampanga data center, which has 10 megawatts (MW) and offers up to 1,200 racks, targeted for the third quarter of next year, and a three-MW facility in Caloocan that provides up to 290 racks.

Mr. Uy said Converge developed its data centers specifically to cater to its unique requirements and internal services, with no plans to offer them for sale.

“We don’t build our data center for other hyperscalers to use. That’s not our business because we are not a real estate company. We are a technology company,” he said.

“The company has recently unveiled a partnership with US-based Super Micro Computer, Inc. (Supermicro) to develop energy-efficient data centers designed to help reduce costs.” — Aubrey Rose A. Inosante

Australian farmers demand bigger say in gov’t animal welfare, environment policies

REUTERS

CANBERRA — Hundreds of farmers from across Australia held a protest this week against government farming policies they said were influenced by environmental and animal welfare activists and which were harming their livelihoods.

Australia is one of the world’s biggest agricultural exporters and farmers nationwide are increasingly angry with the center-left Labor government that has sought to ban exports of live sheep, restrict water use, and accelerate construction of renewable power and transmission in rural areas.

“We deserve to be respected,” National Farmers’ Federation (NFF) President David Jochinke told a crowd on the lawn in front of Australia’s federal parliament in Canberra. “There are alternative voices that are united against us. We don’t think they are the ones that should be setting the policy,” he said. “We feel like we are getting stiffed.”

The government did not send a representative to the rally. Agriculture Minister Julie Collins told the Australian Broadcasting Corporation the government was committed to listening and had helped farmers by expanding overseas market access and investing in biosecurity.

The NFF said more than 2,000 people attended what was its first nationwide rally of farmers in the capital since the 1980s.

The protest is part of a wave of unrest in Europe and elsewhere aimed at governments imposing environmental regulation that farmers say burdens them with red tape and higher costs, as well as limiting their ability to farm.

“Our message is clear: talk to us,” Mr. Jochinke said.

Federal elections are due in Australia by May next year and farm lobby leaders say they will try to eject Labor by raising money and targeting marginal seats.

Opposition leader Peter Dutton told the rally he would reverse a ban on live sheep exports and the opposition agriculture spokesman said he was against water restrictions. “We have your backs,” Mr. Dutton said. 

Australian farmers have seen several years of bumper production thanks to plentiful rain, but pessimism is rife. “Under this government there’s no future for agriculture in Australia,” said Will Croker, a 32-year-old livestock farmer from New South Wales. “It’s not right.” — Reuters

AI can debunk conspiracy theories better than humans

FREEPIK

SCIENTISTS surprised themselves when they found they could instruct a version of ChatGPT to gently dissuade people of their beliefs in conspiracy theories — such as notions that COVID-19 was a deliberate attempt at population control or that 9/11 was an inside job.

The most important revelation wasn’t about the power of AI, but about the workings of the human mind. The experiment punctured the popular myth that we’re in a post-truth era where evidence no longer matters, and it flew in the face of a prevailing view in psychology that people cling to conspiracy theories for emotional reasons and that no amount of evidence can ever disabuse them.

“It’s really the most uplifting research I’ve ever done,” said psychologist Gordon Pennycook of Cornell University and one of the authors of the study. Study subjects were surprisingly amenable to evidence when it was presented the right way.

The researchers asked more than 2,000 volunteers to interact with a chatbot — GPT-4 Turbo, a large-language model — about beliefs that might be considered conspiracy theories. The subjects typed their belief into a box and the LLM would decide if it fit the researchers’ definition of a conspiracy theory. It asked participants to rate how sure they were of their beliefs on a scale of 0% to 100%. Then it asked the volunteers for their evidence.

The researchers had instructed the LLM to try to persuade people to reconsider their beliefs. To their surprise, it was actually pretty effective.

People’s faith in false conspiracy theories dropped 20%, on average. About a quarter of the volunteers dropped their belief level from above to below 50%. “I really didn’t think it was going to work, because I really bought into the idea that, once you’re down the rabbit hole, there’s no getting out,” said Pennycook.

The LLM had some advantages over a human interlocutor. People who have strong beliefs in conspiracy theories tend to gather mountains of evidence — not quality evidence, but quantity. It’s hard for most non-believers to muster the motivation to do the tiresome work of keeping up. But AI can match believers with instant mountains of counterevidence and can point out logical flaws in believers’ claims. It can react in real time to counterpoints the user might bring up.

Elizabeth Loftus, a psychologist at the University of California, Irvine, has been studying the power of AI to sow misinformation and even false memories. She was impressed with this study and the magnitude of the results. She considered that one reason it worked so well is that it’s showing the subjects how much information they didn’t know, and thereby reducing their overconfidence in their own knowledge. People who believe in conspiracy theories typically have a high regard for their own intelligence — and a lower regard for others’ judgment.

After the experiment, the researchers reported, some of the volunteers said it was the first time anyone, or anything, had really understood their beliefs and offered effective counterevidence.

Before the findings were published this week in Science, the researchers made their version of the chatbot available to journalists to try out. I prompted it with beliefs I’ve heard from friends: that the government was covering up the existence of alien life, and that after the assassination attempt against Donald Trump, the mainstream press deliberately avoided saying he had been shot because reporters worried that it would help his campaign. And then, inspired by Trump’s debate comments, I asked the LLM if immigrants in Springfield, Ohio, were eating cats and dogs.

When I posed the UFO claim, I used the military pilot sightings and a National Geographic channel special as my evidence, and the chatbot pointed out some alternate explanations and showed why those were more probable than alien craft. It discussed the physical difficulty of traveling the vast space needed to get to Earth, and questioned whether it’s likely aliens could be advanced enough to figure this out yet clumsy enough to be discovered by the government.

On the question of journalists hiding Trump’s shooting, the AI explained that making guesses and stating them as facts is antithetical to a reporter’s job. If there’s a series of pops in a crowd, and it’s not yet clear what’s happening, that’s what they’re obligated to report — a series of pops. As for the Ohio pet-eating, the AI did a nice job of explaining that even if there were a single case of someone eating a pet, it wouldn’t demonstrate a pattern.

That’s not to say that lies, rumors and deception aren’t important tactics humans use to gain popularity and political advantage. Searching through social media after the recent presidential debate, many people believed the cat-eating rumor, and what they posted as evidence amounted to repetitions of the same rumor. To gossip is human.

But now we know they might be dissuaded with logic and evidence.

BLOOMBERG OPINION

Paul Costelloe takes fashionistas to Paris, Bora Aksu honors mother at London shows.

Paul Costelloe

LONDON — Irish designer Paul Costelloe took fashionistas to a fantasy Paris for his spring collection as London Fashion Week got underway on Friday.

The 79-year-old mainly stuck to four pastel colors — blue, pink, yellow, and green — for the line, called “Le ciel est bleu” (the sky is blue), which also introduced his new bridal line.

Against a painted backdrop of a Parisian boulevard and to the soundtrack of French songs, the designer opened the show with all-blue looks.

Models wore linen or check ensembles, tweed dresses and jackets, and playful jacquard frocks. Floral prints and ruffles adorned some designs.

Costelloe described the line as “very young.”

“While London… in the late ’60s, early ’70s was the kind of fashion trendy capital, Paris was the couture and that was where I grew up in that couture environment and this all remained with me,” he told Reuters. “This collection kind of reflects that period.”

Turkish-born designer Bora Aksu described his mother as his “greatest source of inspiration” as he paid tribute to her with his new collection of layered feminine looks with intricate embroidery.

Models wore tailored jackets, some with puffy or patterned shoulders and sleeves, as well as lace and draped dresses. Florals adorned some of the designs.

Aksu used a color palette of white, pale pink, yellow, and blue but with bursts of bright red and navy.

London is the second leg of the month-long Spring-Summer 2025 catwalk calendar that began in New York and will also include fashion capitals Milan and Paris.

London Fashion Week, which celebrates its 40th anniversary this year, officially began on Thursday evening with shows and a party featuring singer Charli XCX to launch a new collection by high street retailer H&M.

It runs until Sept. 17 with Burberry, Erdem, and Simone Rocha among the labels on the schedule.

The British Fashion Council (BFC), founded in 1983, launched its first London Fashion Week in 1984.

Over the decades, famous names including the late Alexander McQueen and Vivienne Westwood have wowed fashionistas with their creative visions at the London event.

“It’s known for its entrepreneurship, it’s known for its creativity, it’s freedom of expression,” BFC Chief Executive Caroline Rush told Reuters on Thursday.

“Those are the hallmarks of British fashion and that’s what you’re going to be seeing over the next five days at London Fashion Week.” — Reuters

Simoes to be Ford Group Philippines managing director by December

Incoming Ford Group Philippines Managing Director Pedro Simoes — PHOTO FROM FORD GROUP PHILIPPINES

FORD MOTOR COMPANY recently announced the appointment of Pedro Simoes as managing director of Ford Group Philippines effective Dec. 1. Mr. Simoes — currently the marketing, commercial vehicle and fleet director of Ford Middle East — will succeed Michael Breen who will be repatriating back to the US.

Mr. Simoes will relocate to Manila and will report directly to Yukontorn “Vickie” Wisadkosin, president of Ford ASEAN and Asia-Pacific Distributor Markets.

In his new role, he will be responsible for continuing to drive Ford’s growth in the Philippines, including sustaining the strong momentum for the brand, further enhancing the ownership and after-sales experience, and fostering strong relationships with dealer partners to better serve our Ford customers.

“With a proven track record of success in driving brand growth, market expansion, and collaborative leadership style, I am confident that Pedro will be able to lead the team and work together with our dealer partners to further strengthen our presence in the Philippines,” said Ms. Wisadkosin.

“We want to also express our sincere appreciation for Mike’s exceptional contributions to the growth of the Ford brand in the Philippines, having led the team to deliver exceptional business results. His personal commitment and engaging leadership have strengthened dealer relations significantly. We wish him the very best of luck in his new role in the US,” she added.

Pedro joined the Ford Middle East team in Dubai, United Arab Emirates in 2016 and brings “extensive experience in leading and growing businesses.” He most recently served as marketing, commercial vehicle and fleet director for the Middle East where he established new department, team and processes for the region in 2021. Prior to that, Pedro was retail marketing and revenue management director for the region, working with markets in Africa, Middle East and Asia-Pacific to deliver incremental net profit forecast and 40% volume increase in the first year.

Throughout his career, he has held key leadership roles in marketing, brand, products, and sales functions for various automotive brands, resulting in his deep understanding of the automotive industry.

Mr. Simoes earned a Bachelor of Science in Engineering (BESc) and Master of Science (MS) in Material Science Engineering from Universidade Nova de Lisboa, Portugal in 2007, and Executive Advance Marketing Program from Universidade Catolica Portuguesa in 2012.

Yields on government debt mixed

By Abigail Marie P. Yraola, Deputy Research Head

YIELDS on government securities (GS) traded in the secondary market edged lower last week following the release of US consumer inflation data and as investors looked ahead to the US Federal Reserve’s policy decision.

GS yields, which move opposite to prices, went down by an average of 1.12 basis points (bps) week on week, according to the PHP Bloomberg Valuation Service Reference Rates as of Sept. 13 published on the Philippine Dealing System’s website.

Rates at the short end of the curve were mixed, with the 91- and 364-day Treasury bills (T-bills) falling by 5.34 bps and 6.16 bps to fetch 5.8616%, and 6.0118%, respectively. Meanwhile, the 182-day T-bills inched up by 0.20 bp to fetch 5.9899%.

At the belly, yields fell across all tenors. The two-, three-, four-, five-, and seven-year Treasury bonds (T-bond) saw their rates decrease by 1.76 bps (to 6.0016%), 1.60 bps (6.0083%), 1.26 bps (6.0193%), 0.99 bp (6.0321%), and 0.5 bp (6.0556%), respectively.

On the other hand, tenors at the long end saw their rates climb. The 10-, 20-, and 25-year T-bonds rose by 1.65 bps, 1.78 bps and 1.67 bps to fetch 6.0926%, 6.214%, and 6.2134%, respectively.

GS volume traded was at P23.13 billion on Friday, lower than the P31.8 billion recorded a week earlier.

ATRAM Trust Corp. Vice-President and Head of Fixed Income Strategies Lodevico M. Ulpo, Jr. said market players started the week cautiously, but risk sentiment shifted after the release of key US data.

“Despite the selloff in US Treasuries following the higher-than-expected inflation figures in the US, bond investors in the local space remained resolute as they extended duration across the curve on expectations of policy easing from the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP),” Mr. Ulpo said in a Viber message.

A bond trader said the market’s main focus was the US consumer price index data released on Sept. 11, as well as the European Central Bank’s policy decision.

“Although the auctions were reflective of strong support in the market considering the upcoming rate cuts by central banks including the BSP, the main drive of the week was whether the Fed would cut by 25 or 50 bps [this] week, depending on the data released from the US,” the trader added.

For this week, the Fed’s two-day policy meeting will be the main driver of yield movements, both analysts said.

“We could see the market trade lower this week as the Fed begins its cutting cycle by at least 25 bps. There has been some holdover speculation that the Fed will cut more than 50 bps, but this is less likely given recent data,” the trader said.

“Along with the 10-year bond auction, the Federal Open Market Committee meeting is the highly awaited event for this week as the Fed will finally begin its easing cycle,” Mr. Ulpo said. “We expect Philippine bonds to recoup some losses this week as investors optimize fixed-income positioning before any yield correction from policy normalization.”

The Federal Reserve is nearly as likely to deliver an outsized interest-rate cut this week as a more-usual-sized reduction, trading in rate-futures contracts suggested on Friday, as financial markets priced in a bigger chance that the Fed will move more aggressively, Reuters reported. A quarter-point reduction at the Fed’s Sept. 17-18 meeting is still seen as the slightly more likely outcome, but only marginally so. — with Reuters

Origin of human bird flu case in Missouri still unknown — CDC

REUTERS

WASHINGTON — Epidemiologists have not yet identified exactly how a person in Missouri contracted bird flu last week, the Centers for Disease Control and Prevention (CDC) said.

The human case was the 14th diagnosed in the US this year. The other 13 cases were among farm workers and linked to bird flu outbreaks on poultry or dairy farms.

The infected individual was admitted to the hospital with symptoms including chest pain, nausea, vomiting and diarrhea, CDC principal deputy director Nirav Shah said on a Thursday call with reporters. It was unclear whether the patient’s underlying conditions caused the symptoms or the flu.

The investigation into the origin of the infection is ongoing and the CDC has been unable to determine if the case was related to the current outbreak of bird flu in dairy cattle, Mr. Shah said.

“Right now, evidence points to this being a one-off case,” said Mr. Shah. Missouri has not invited the CDC to conduct an on-site investigation but the CDC is working closely with state health officials on its response to the case, Mr. Shah said.

Mr. Shah also said the CDC will work with five commercial laboratory companies — Aegis, ARUP, Ginkgo BioWorks, Labcorp, and Quest — to develop their own diagnostic tests for public health outbreaks, including bird flu.

The USDA said eight dairy herds had been infected with bird flu in California since the first cattle case was identified there on Aug. 30.

Bird flu has infected more than 200 dairy herds in 14 states since March, USDA data showed. The California herds are quarantined and the state is expected to conduct bulk milk testing at dairies within a geographic zone around the affected farms, Eric Deeble, deputy under secretary for marketing and regulatory programs at the USDA, said.

The agency does not know how the virus arrived in California, Mr. Deeble said.

The CDC will launch its program to vaccinate farm workers against the seasonal flu in October, Mr. Shah said. The campaign is meant to prevent dual infection with bird flu and seasonal flu, which could lead to virus mutations. — Reuters

AREIT shares rise after asset disposition, investment

AREIT, Inc. saw its shares rise last week as it sold assets to fund investments while rate cut expectations bolstered market sentiment, analysts said.

AREIT was the 20th most actively traded last week with a total of 14.59 million worth P526.25 million changing hands from Sept. 9-13, data from the Philippine Stock Exchange showed.

Shares of the company closed at P37.85 apiece, 5.3% higher than the P35.95 close a week prior.

For the year, the stock’s price rose 13.3% from its P33.4 close on the last trading day of 2023.

Analysts attributed the week-on-week growth to positive market sentiment driven by asset dispositions and expectations of rate cuts later in the year.

AREIT has sold three office condominium units worth P42.69 million and covering 339 square meters (sq.m.) to partially pay for its acquisition of Seda Hotel in Lio, El Nido.

The real estate investment trust acquired the hotel on Jan. 17 from Econorth Resort Ventures, Inc. for P1.19 billion.

“AREIT’s decision was likely viewed positively by the market as this pivots the company towards assets that are expected to generate higher yields. Despite a recent pullback, driven largely by institutional selling, this move may have renewed investor confidence, suggesting strong forward-looking growth potential.” Jervin De Celis, equity trader at Timson Securities, said in an e-mail.

“After the news hit, AREIT’s stock jumped about [around 5%], showing the market’s clear optimism around the condo sellout,” Jemimah Ryla R. Alfonso, equity analyst at Regina Capital Development Corp., likewise said in a separate e-mail.

She added that rate cut expectations later in the year further the stock upward.

“REITs have been trekking upwards as interest rates are likely to go down further until the remaining months of the year,” she said.

On Aug. 15, the Bangko Sentral ng Pilipinas (BSP) cut benchmark interest rates by 25 basis points to 6.25%, its first cut in nearly four years.

BSP Governor Eli M. Remolona, Jr. signaled another rate cut before the end of the year.

Meanwhile, AREIT’s net income surged 38% to P1.42 billion in the second quarter from P1.03 billion in the same period last year. This brought the company’s net income to P4.28 billion for the first six months of the year.

For the whole year, Ms. Alfonso expects AREIT to record P7 billion in its bottom line.

Mr. De Celis sees full-year earnings at around P6 billion.

“We project that AREIT’s [third quarter] net income will be approximately P1.5 billion. For the full year, earnings are expected to fall within the range of P5.8 to P6 billion, given the company’s asset infusions and strategic investments. AREIT’s revenue-generating capabilities remain solid…” Mr. De Celis said.

This week, Mr. De Celis placed his immediate support at P37.1 and resistance at P38.

Ms. Alfonso pegged her support at P36.9 and immediate resistance at P38.5. — Karis Kasarinlan Paolo D. Mendoza

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