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US undercounts bird flu in cattle as farmers shun testing

REUTERS

WASHINGTON/CHICAGO — The US bird-flu outbreak in dairy cattle is much larger than official figures suggest due to farmers’ reluctance to test their animals and risk the economic consequences of a positive result, according to Reuters interviews with dairy experts, veterinarians, and farmers in six states with known cases.

The US Department of Agriculture (USDA) has counted bird flu in about 190 dairy herds in 13 states since March. The virus’s jump from birds to cows heightened concerns that it could adapt to spread among humans.

Scientists have warned that limited surveillance could weaken the US ability to respond to further human spread.

Thirteen dairy and poultry farm workers have been infected with bird flu this year, according to the Centers for Disease Control and Prevention.

Reuters spoke with more than a dozen researchers, veterinarians, farmers, and livestock industry groups to understand whether the bird-flu spread in dairy cattle is being accurately tracked.

State animal and human health experts in three states who work closely with veterinarians and farmers said the government tally is likely an undercount because farmers are fearful of the economic hardship brought by a positive test, including being restricted from selling their milk or cattle for weeks.

The virus reduces milk production in cattle. The US, the world’s second-largest cheese producer after the European Union, is the only country with known infections in cows.

“While we have nine official positives, there are many, many, many more farms that are impacted or infected that are just not testing,” said Joe Armstrong, a veterinarian and cattle expert at the University of Minnesota, who has spoken with farmers across the state.

A more accurate cattle case count for Minnesota would be three to five times higher, Mr. Armstrong said.

A USDA spokesperson said the agency has encouraged testing by requiring negative tests for cows being shipped over state lines since April and offering a voluntary program for testing farmers’ milk supplies weekly.

Twenty-four dairy herds are participating in that program, of roughly 24,000 farms nationally that sell milk, according to agency data.

Six farmers, veterinarians, and other experts said farmers were reluctant to test because they did not believe the virus is a serious concern, or because government incentives to test did not offset their expected losses.

Colorado farmer Terry Dye, 78, said his two dairies were infected this summer and he did not notify the state because he wanted to handle it privately. State agriculture officials eventually heard about the infections and quarantined his animals, he said.

“Sometimes it’s more convenient to not know,” said Mr. Dye. USDA offers to compensate farmers with infected animals for veterinary care and 90% of lost milk production. Forty-seven herds have signed up for agency financial assistance, though that total includes farms without infections that are seeking support for biosecurity costs.

USDA tests raw milk from cows to identify the virus in herds. The Food and Drug Administration has separately tested commercial milk supplies and says pasteurization kills the virus, so milk is safe to drink.

Experts said ways to better track the spread include more states mandating raw-milk testing or higher compensation to farmers. Michigan and Colorado have taken aggressive approaches to containing bird flu in cattle, though experts there still think cases are being missed.

Phil Durst, an educator with Michigan State University who has spoken with farmers whose herds contracted the virus, said Michigan’s 27 positive herds are likely an undercount by at least a third.

Jenna Guthmiller, an assistant professor of immunology at the University of Colorado who has studied the virus, said Colorado’s 63 positive herds are also likely an undercount.

After a series of outbreaks, Colorado on July 22 became the only state to require dairy farms to test bulk supplies of milk each week. The tests have uncovered 10 infected herds that have been quarantined.

“Once we better understand the scope and scale of the outbreak, we can put measures in place to mitigate further spread,” said Maggie Baldwin, Colorado’s state veterinarian.

Some farmers do not test because they distrust government officials or information about the risks of bird flu to cattle and humans, four sources said.

“There’s plenty of dairy farms that I’ve heard about that just don’t believe it,” said Jason Schmidt, a dairy farmer in eastern Kansas.

In Oklahoma, a dairy that suspected it was infected in April did not submit stored milk samples to USDA for testing until July, according to the state. The herd had recovered by the time testing confirmed an outbreak, and Oklahoma has not had other reported cases, the state said.

In states with few or no infected cows, farmers and veterinarians are concerned that when the virus arrives or resurges, they won’t be able to track it.

“The longstanding adage is that the cure for fever is don’t take a temperature. So, if we don’t test, then we’re not positive,” said Mark Hardesty, a dairy cattle veterinarian in Ohio, which reported one dairy herd infection in April.

Wisconsin, the No. 2 milk-producing and top cheese-producing state, has not reported any bird-flu cases in cattle.

Dairy farmers likely would not test even if they suspected symptoms in their herds, said Keith Poulsen, director of the Wisconsin Veterinary Diagnostic Laboratory. “It’s still cheaper to just go through a herd outbreak, recover, and move on down the road,” Mr. Poulsen said. — Reuters

Style (08/19/24)


Rustan’s rewards going green

THIS August, Rustan’s is rewarding green shoppers not just with products, but good deals. Rustan’s Eco Living Elevated is offering a selection of eco-friendly brands and actively supporting labels that advocate environmental stewardship and innovation. These include Grown Alchemist which uses cutting-edge science for skincare that’s both effective and kind to the environment; La Bruket which has luxurious botanical-based formulations; Neal’s Yard Remedies with its herbal remedies and natural formulations; L’Occitane’s range of soaps, lotions, and fragrances crafted with a respect for the environment; MALIN+GOETZ which offers clean, vegan skincare and body care; from the Philippines, For Keeps whose bar soaps, hand sanitizers, and body washes are formulated with clean ingredients; and Jane Iredale which offers mineral cosmetics that guarantee high-performance results while nurturing skin. When it comes to houseware, local company Calfurn offers world-class furniture crafted from indigenous and sustainable materials, while Spanish brand Vidrios Reciclados San Miguel has glassware made from 100% recycled glass. For the kitchen, Natural Elements by KitchenCraft presents an eco-friendly range designed to reduce plastic use. French brand Pebbly provides naturally made items for cooking and entertaining. There are also eco-friendly apparel — Freedom Moses’ genderless slides are made from eco-friendly PCU plastic, while Bohonomad has traditional rope sandals, and swimwear brand Sorbet Island champions inclusivity with a one-size-fits-all range. For jewelry, Anna Zuckermann offers high-quality gems derived through an ethical, violence-free, and ecologically responsible process. In an effort to reduce waste and promote a circular economy, Rustan’s For Keeps is inviting customers to drop off their empty For Keeps bottles at any Rustan’s branch for recycling. Rustan’s Beauty Addict and FSP Members can take advantage of special green offers. Patrons can earn 1,000 bonus FSP points by using their FSP Tote Bag or any tote bag for transactions throughout August. New FSP members who sign up during the weekends of August will receive a free FSP Tote Bag. Learn more at www.rustans.com and @rustansph on Facebook, Instagram, and X.


Uniforms made from recycled plastic bottles

UNIVERSAL Robina Corp.’s (URC) Thailand office has stepped up its sustainability efforts with the URGreen Upcycling Uniform Campaign. The regional subsidiary’s campaign promotes the recycling of PET plastic bottles into uniforms. The URGreen Upcycling Uniform Campaign aims to reduce CO2 emissions by 1.714 kg per shirt. Each uniform shirt is made from 14 recycled 600-ml PET water bottles, which were collected from January to April. URC Thailand collected a total of 21,000 plastic bottles to be turned into polo shirts. By June this year, a total of 1,500 shirts were produced and distributed to employees. The reduced CO2 emissions for all shirts amounted to 2,571kg CO2e, which is equivalent to planting 215 trees. The design of Vichida Pengnum, URC Thailand’s Senior Employee Relations Supervisor, was chosen for the company polo. URC Thailand aims to produce an additional 4,800 shirts in the future, which require 67,000 recycled plastic bottles. Last year, URC Flour had its own upcycling initiative where it partnered with local brands AraPilak and Aecovas Apparel to produce eco-friendly clothing using recycled cotton sacks. In the Philippines, URC produces brands such as Great Taste, C2 Cool & Clean, Piattos, Maxx candy and Cream-O cookies. Its leading regional brands include Lexus, Tivoli, and Fun-O.


Nuxe introduces new Boost collection

THE NUXE Prodigieuse Boost collection aims to boost skin’s radiance with its subtle scented textures. Infused with antioxidant extracts like jasmine, citrus, and Vitamin C, these formulations strengthen and protect skin from external factors, such as wind, pollution, and UV rays. The new Nuxe Prodigieuse Boost Glow-Boosting Serum with Vitamin C (P2,350) is a certified organic serum with a formula that melts into the skin, releasing stabilized Vitamin C and natural-origin hyaluronic acid. The Multi-Correction Glow-Boosting Cream-Gel (P2,450) and Multi-Correction Glow-Boosting Cream (P2,450) brighten, smooth, and relax skin, and fade the first signs of aging. The cream is meant for normal to dry skin, while the gel is for normal to combination skin. The Multi-Correction Eye Balm-Gel (P2,150) rejuvenates tired eyes, illuminates the eye area, and fades puffiness and dark circles. The Night Recovery Oil Balm (P2,750) renews and relaxes the skin. The Multi-Perfection Smoothing Primer (P2,250) fills in imperfections, mattifies shiny areas, and provides a “bare skin effect,” making it ideal as a make-up base or for touch-up application throughout the day. Nuxe is exclusively available in-store at Rustan’s and Look; and online on Rustans.com, Lazada, and Shopee.


Hoka Launches Speedgoat 6 in the PHL

HOKA debuts the latest iteration of the Speedgoat shoe, the Speedgoat 6. This updated shoe introduces ultralight CMEVA cushioning to the midsole, combined with aggressive traction for the lightest and most responsive Speedgoat to date. These updates ensure an agile and grippy ride for use on challenging terrain. The Speedgoat 6’s Vibram Megagrip outsole, equipped with Traction Lug, delivers aggressive traction across both wet and dry surfaces. Drawing inspiration from the resilience of a goat’s hoof, the 5mm lugs feature a revised orientation, increasing grip and adaptability. The shoe features a new lightweight woven upper designed to enhance breathability while remaining durable. A Hoka patent pending dynamic vamp and internal support chassis offer an accommodating fit to keep the foot stable and secure at a variety of paces. The dual-gusseted tongue and reinforced toe bumper allow for enhanced support and protection. It weighs in at 8.2 oz for a women’s size 8 and 9.8 oz for a men’s size 10, with a 40mm stack height and 5mm drop. The Speedgoat 6 is available for trial and testing at Hoka stores in One Ayala Mall, GH Mall, SM Aura, and Ayala Malls Manila Bay. It is also available at Planet Sports Trinoma, Planet Sports Galleria Cebu, Planet Sports Clark City Front Mall, Runnr, and online at Hoka.com.


Old Navy’s Straight Jean collection

OLD NAVY’s new Straight Jean collection for women features straight cut jeans, in a relaxed slouchy fit or fitted to show off curves. The women’s jeans use clever Secret-Smooth front pockets for a smoothing effect and Never-Quit Shape Retention, the latest stretch fabric. For men, they feature 360° super stretch tech for maximum comfort. In the Philippines, Old Navy is exclusively distributed by Specialty Lifestyle Concepts, Inc. (formerly Casual Clothing Retailers, Inc.), a member of SSI Group, Inc. Old Navy is available at Bonifacio High Street, Shangri-La Plaza, and oldnavy.com.ph.

AI phones from Google and Apple will erode trust in everything

2H MEDIA-UNSPLASH

ALPHABET, INC.’s Google is racing to stuff its products with the most advanced artificial intelligence (AI) features, including some that will make you question everything you see and hear online. Its new Pixel phones make it easy to manipulate photos, adding people who weren’t in the original shot or moving their positions. You’ll be able to record phone calls, albeit with a disclosure to the person on the other line, and get a detailed summary of the conversation. These cool, if creepy, features point to a disconcerting direction that AI tools are taking us in as they get built into more phones. The easier it is to manipulate the content we capture on our devices, the harder it’ll be to trust what we see on them too.

For the new Pixel 9 phones, which go on sale on Aug. 22, Google has concentrated most of its AI prowess — abetted by the powerful G4 chip inside the phone — on the camera. The Add Me feature is billed as an alternative to the awkward angles and poses of the selfie. You take a photo of a friend, then get them to take a photo of you. Google’s AI stitches the two so it looks like you were standing together.

In the age of social media, where the statistical probability of looking at an untouched photo has diminished considerably, isn’t that going to make it even harder to determine what’s real? Not at all, according to Google’s Rick Osterloh, who took charge of Google’s Android platform earlier this year. In an interview with the Wall Street Journal, he said Google was simply allowing people to edit their real-life moments, and “store the memory how they want” — no different than Photoshop, he added.

It is in fact, very different. The vast majority of people who take photos with their phones don’t pay $23 a month to use Adobe Photoshop. But millions of people who are likely to buy new AI-enabled phones from Apple, Inc., Samsung Electronics Co., and Google will be able to manipulate photos with a few taps. Apple’s forthcoming iPhones will have a Clean Up tool to remove objects and people from photos. Samsung will let you move someone in a photo so it looks like they’re facing someone else.

These features are marketed as conveniences, but they’ll also make us more likely to question the accuracy and reality of photos far more than we do now. In his interview, Osterloh also defended a TV ad promoting Google’s AI tool Gemini during the Olympics, in which a father encourages his young daughter to use AI to write a letter to an athlete to tell her “how inspiring she is.” Google was criticized for being tone deaf to the real reason parents help their kids write fan mail: the process of expressing gratitude. But according to Osterloh, this is just like the transition people made from sending hand-written thank you notes to e-mails. “This is a way to touch more people,” he said.

Of course, the flip side of connecting with more people is that those people won’t know if they’re being “touched” by a human being at all.

Until now, the price of tech’s latest conveniences has been money, personal data, and attention. Use Google’s services and you’ll be subject to an online auction for your eyeballs that shares your personal data — location, browsing history, videos you’ve watched, and more — with an array of different advertising networks for targeting. There’s less of that on an Apple device, but you’re still likely spending hours scrolling on one of the most addictive tools in human history if you have an iPhone.

The price we pay for tech’s whizzy features seems subtle and abstract at first, but over time becomes clearer as they go mainstream. People around the world now spend about six hours a day on smartphones, often at the expense of sleep, kids, or more fulfilling activities. More than 70% of companies in the US now collect personal data, according to Statista, and two-thirds of consumers around the world feel tech companies have too much control over those details, according to YouGov research.

What will the price be for a broader rollout of generative AI tools? Trust seems high up there, and not just of technology companies but increasingly of what we see online, including things that are real. When Donald Trump claimed that official photos of crowds at Kamala Harris rallies were AI generated, the rumor — which was false — spread to millions on X and other social platforms because of its plausibility. Like it or not, the growing ubiquity of AI phones will force us to become more wary of what we see and hear — unless we want manipulated versions of reality to be the new normal.

BLOOMBERG OPINION

BSP pushes for digitalization of firms’ wage payments

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) is pushing for the digitalization of wage payments to help boost financial inclusion.

“Digitalizing wage payments is one of the most effective tools in driving financial inclusion. A study indicated that more than half of adults in developing countries opened their first bank accounts to receive digital wage payments,” the BSP said in a statement.

“For employees, therefore, wage digitalization can unlock access to financial products and services -— such as savings and insurance —which enhance resilience and financial health.”

The central bank, along with the Department of Labor and Employment (DoLE), are pushing employers to utilize digital options for their payrolls.

The BSP’s 2021 Financial Inclusion Survey showed that the majority or 70% of salaries in the private sector are still paid in cash.

“For employers, digital wage payments bring significant gains such as productivity improvement, accuracy, safety, access to finance and markets, and enterprise formalization.”

BSP Deputy Governor Bernadette Romulo-Puyat said the business sector must continue sustaining the shift to digital payments from cash.

“Let us continue working together to make the goal of a more financially inclusive and resilient Philippines a reality,” she said.

Digital payments made up 52.8% of the volume of retail transactions in 2023, latest BSP data showed, up from the 42.1% share in 2022.

In terms of value, 55.3% of retail transactions last year were done online, also rising from 40.1% the year prior.

The BSP wanted at least 50% of the volume and value of retail transactions done online by end-2023 under its Digital Payments Transformation Roadmap.

The increase in digital payments was driven by wider use of online transaction channels among individuals and businesses, the central bank said, with the coronavirus pandemic accelerating this shift.

The central bank wants online payments to make up 60-70% of the country’s total retail transaction volume by 2028, in line with the Philippine Development Plan. — Luisa Maria Jacinta C. Jocson

Mober establishes EV delivery, warehousing services in Cebu

PHOTO FROM MOBER

PHILIPPINE GREEN logistics service pioneer Mober has made “sustainable delivery services” in Cebu available to support the regional expansion of Swedish home furnishing retail giant Ikea Philippines. Mober will use its 100% EV fleet to support home deliveries in Cebu and other Visayas provinces, “ensuring zero-emission deliveries.”

In addition to the sustainable delivery services, Mober will assist the furniture brand’s warehousing solutions via a collection hub located in Cebu City, speeding up delivery times and increasing product accessibility for Filipino households in the Visayas. The collection hub serves as the last-mile delivery point for Ikea Philippines, while housing Mober’s EV charging stations. The Cebu City facility includes Mober’s latest 15-kW OCPP chargers, compatible with Type 2 and GB/T standards, ensuring efficient support for Mober’s EV fleet serving Ikea.

“We are thrilled to embark on this groundbreaking journey, expanding our green delivery solutions to the Visayas. This represents a leap forward for the Philippines in embracing sustainable practices across the logistics industry. As EV ownership gains momentum, Mober is well-positioned to further its commitment to providing sustainable business solutions toward a net-zero carbon emission future by leveraging our all-electric fleet,” said Mober Founder and CEO Dennis Ng.

Mober supports the end-to-end supply chain sustainability of major FMCG and retail brands. Besides Ikea Philippines, Mober partners with SM Appliance Center, Unilever Philippines, Nestlé Philippines, and Nespresso, as well as renowned logistics companies Maersk and Kuehne+Nagel.

ePLDT’s Victor Genuino sees bright future for PHL data centers 

VICTOR S. GENUINO

By Ashley Erika O. Jose, Reporter

VICTOR S. GENUINO, president and chief executive officer of ePLDT, Inc., aspires to position the Philippines as a leading hub in the data center market.

“I would love for the Philippines to be known as the hyperscaler hub of Asia Pacific,” Mr. Genuino said in an interview with BusinessWorld.

“I think the Philippines is in a very unique geographical position to be able to be one,” he added.

Before his stint as the president and CEO of ePLDT, the information and communications technology arm of listed PLDT Inc., Mr. Genuino served as the head of customer retail services and corporate communications at Manila Electric Co. (Meralco) for 10 years.  

During his time at Meralco, Mr. Genuino was also tasked with overseeing the power company’s two subsidiaries: Meralco Energy, Inc. (MSERV) and MSpectrum, Inc., the solar unit.

“Obviously, a lot of discussions and developments around energy and how we could help customers be more efficient in the way they manage and utilize energy. It was also very critical at that time for my role to ensure that the power requirements of our customers were prepared beforehand,” he said.  

His previous roles in the energy sector have proven beneficial considering that power is the lifeblood of the data center business, Mr. Genuino said.

“Our Vitro Sta. Rosa is a 50-megawatt site. So, if you look at power consumption, that is the equivalent of maybe five Mall of Asia combined, in terms of power consumption,” he added.  

The biggest cost component of the data center business is power costs, Mr. Genuino said, adding that it is important for companies focusing on the data center business to adopt sustainable measures due to data centers’ high power consumption.  

“We have to ensure that the data center has adequate power. We have to make sure that the data center has reliable and affordable power… and energy moving forward has to be sustainable,” Mr. Genuino said.

With this, ePLDT is sourcing its power requirements from renewable and sustainable sources of energy to meet its energy needs while also offsetting high power costs, he said.  

For instance, all of its running data centers are operating at about 20% sustainable power, while its largest data center, Vitro Sta. Rosa, is powered by a 35% sustainable source of energy.

In July, the company completed the structure of its 50-MW hyperscale Vitro Sta. Rosa, its 11th and largest data center to date.

The structural completion of Vitro Sta. Rosa will pave the way for power integration and energization, ePLDT said.

“We have been running the data centers throughout this time. Since then, we have managed to build a portfolio of 10 data centers. We have an extensive footprint of data centers,” he said.

He also said that there has been a growing interest in establishing data centers among companies, especially with the rise of technologies such as artificial intelligence and cloud service providers.

“I think we have a very good market share position, a dominant share position with regard to data centers and colocation space. With the recent trend of establishing data centers due to the advent of cloud technology, many are interested. The industry is actually turning into a very interesting and competitive landscape,” Mr. Genuino said.

The country can also benefit from the growing interest in the data center space, he said, adding that it would also boost the country’s digital economy.

“I think the key is to be able to attract what we call hyperscalers, cloud service providers. If we are able to attract them to relocate, establish, and build a presence in the Philippines, it will boost the digital economy,” he added.

The country is considered an ideal hub for data centers because of its location in Southeast Asia; however, the country’s high power costs may deter investors, considering that the Philippines’ neighboring countries subsidize power costs, he said.

“Still, I am very bullish on the data center space. I think hyperscalers are really looking at the Philippines to be able to come in and invest,” Mr. Genuino said.  

Earlier, the company said that its planned 12th data center may double the capacity of Vitro Sta. Rosa while it is still in the site selection process for its 13th and 14th data centers.

For its 12th data center, the company said it will be located somewhere in South Luzon due to the availability of connectivity and energy redundancy; while it is on a constant lookout for its 13th and 14th data centers.  

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

China central bank pledges billions worth of funding to speed along recovery in disaster-hit farm regions

REUTERS

BEIJING/HONG KONG — China’s central bank said it will provide an additional 100 billion yuan ($14 billion) to banks to support rebuilding areas devastated by floods, after recent extreme weather damaged around 6 million acres of crops.

The world’s largest agricultural importer has in recent weeks been plagued by Typhoon Gaemi lashing its eastern seaboard, record rains in its southern rice fields, and intense heat waves across its northern corn and wheat yielding regions.

After state media reported Vice Premier Liu Guozhong called for China’s vast agricultural sector to push for a bumper harvest this autumn, the central bank announced it will issue a further 100 billion yuan of a re-lending facility to support 12 areas with flood prevention and reconstruction initiatives.

The People’s Bank of China (PBoC) will direct the funding towards Fujian, Guangdong, Henan, Heilongjiang, Hunan, Jilin, Jiangxi, Liaoning, Shaanxi and Sichuan provinces, along with the megacity of Chongqing and the Guangxi region, and to farmers, small and micro-sized firms and households, a statement said.

The PBoC had issued a total of 2.61 trillion yuan in re-lending quotas to support agriculturalists and small firms.

“The PBoC will urge its branches in relevant provinces to make good use of the newly added re-lending quotas… ensure the funding needs of disaster-stricken enterprises and help them resume production,” it added.

China suffered 76.9 billion yuan in economic losses from natural disasters last month, with 88% of those losses caused by heavy rains and floods, according to the Ministry of Emergency Management.

It was the biggest amount of losses for the month of July since 2021, ministry data showed.

Mr. Liu, during his visit to Liaoning and Jilin provinces over the weekend and Monday, urged officials to improve the agriculture sector’s capacity for disaster prevention and mitigation, according to the official Xinhua news agency.

He also “urged measures to drain accumulated water, promote the restoration of affected crops and guide farmers in replanting areas where crops were destroyed,” the report added.

Producers from the US to Brazil and Indonesia will be watching to see whether China will increase its food imports to meet the demands of its 1.4 billion people.

A cut in domestic farm output could bolster the Asian giant’s demand for overseas supplies, which would impact global food supply and prices.

Beijing envisions 92% self-sufficiency in staple grains and beans by 2033, up from 84% during 2021-2023. But an increase in the number of extreme weather events calls that into question.

Natural disasters in July affected almost 26.4 million people across China, with 328 either dead or missing. More than one million people were relocated, 12,000 houses collapsed and 157,000 more were damaged. Some 2.42 million hectares (5.98 million acres) of crop area were also affected. — Reuters

Knight Frank: Manila third highest in first-half logistics rental growth in Asia-Pacific

Manila logged the third-highest year-on-year logistics rental growth at 9.1% in the Asia-Pacific region in the first semester, and a half-year rental growth of 1.7%, according to the latest report by real estate consultancy Knight Frank. Based on the report, strong demand for cold storage facilities in the Philippines has led major industrial developers to expand. Meanwhile, rents for logistics spaces in the region sustained an increase of 2.4% year on year.

Knight Frank: Manila third highest in first-half rental growth in Asia-Pacific

Luxury’s China slump: belt tightening or an issue with value?

CHANEL.COM

By Shuli Ren

MULTINATIONALS have a puzzle that they need to tease out in China, the world’s biggest market for luxury products: What’s driving a slump in sales? Is it because a slowing economy is leading people to tighten their belts, or a sign that the Chinese no longer believe many brands can hold their value?

This question matters because it affects luxury houses’ long-term prospects. If the problem is just a weak economy, they might accept recent earnings as a temporary rough patch and carry on business expansion as before. But if people start to see luxury products as mere commodities, brands have a much bigger problem and must start to cut back on supply and restore scarcity value.

In particular, executives need to worry about speculators. Just like trend-chasing quant funds and Japan’s Mrs. Watanabe, they take one-way price bets and no one in the industry really knows the scale of the gamble. The only difference, perhaps, is the lack of leverage — carry traders, for example, would typically take out cheap loans to invest in something that has higher returns.

This phenomenon is likely to be pronounced in China. After all, Chinese are a pragmatic bunch. Even when the economy was doing well, many buyers were making an investment case for their purchases. For instance, Chanel’s classic handbags have been well-loved by fashionistas, in part because of their resale value. The iconic French brand has been speeding up price hikes since 2016, doubling the cost of its medium classic flap bag from $4,900 to $10,800. As online resale platforms blossomed, many consumers have been able to ride on Chanel’s price hikes and sell their second-hand items for a profit.

Chanel typically reviews handbag prices twice a year, in March and September. It raised the flap bag prices by 6% to 8% this spring, with all its models retailing for more than $10,000. This makes Chanel as much an investment as a good, encouraging both speculators and end-consumers to purchase the newest lineups.

But the presence of speculators can also ruin iconic brands. Kweichow Moutai Co., China’s most prestigious premium liquor distiller, is a good cautionary tale. From 2016 to early 2021, the wholesale price of its iconic Feitian baijiu rose 358% to a peak of 3,850 yuan ($536) per 500-milliliter bottle, drawing in an army of hoarders.

Prices of Moutai started to drop this spring, according to Bloomberg Intelligence’s Ada Li. But it was the big midyear e-commerce shopping festival in June that broke the camel’s back. JD.com, Inc. sold Feitian at only 1,499 yuan per bottle as a way to draw shoppers to its platform.

While the wholesale price seems to have stabilized in early August, investors have lost faith in this household brand. There’s now worry of oversupply and that speculators might be keen to lock in profit before the situation worsens again. UBS Group AG estimates that hoarders have piled up about 14 months’ worth of Moutai liquor supply over the years, with an average purchase cost of 2,079 yuan a bottle.

As China suffers from an economic Long COVID, it’s clear that brands with better resale value are much more resilient. Last year, the prices of Hermes International SCA’s second-hand products continued to grow, while many other luxury brands, including LVMH Moet Hennessy Louis Vuitton SE’s Louis Vuitton, and Dior experienced a decline, according to Bernstein Research. This perhaps explains why Hermes’ earnings in the second quarter were a lot prettier than LVMH’s. Kering SA, meanwhile, is at the bottom end of the table because its flagship, Gucci, has too many discounted channels, from private sales to outlet stores, mostly in Asia. Second-hand Gucci sells at about a 40% discount.

For now, the likes of Chanel and Hermes may take comfort that they can still raise prices amid this weak macro backdrop. But they need to be careful with inventory management. Past steady annual price increases have already drawn in one-way bets, not unlike how the Bank of Japan’s yield curve control attracted macro tourists to the yen carry trade. When the game of musical chairs stops — as markets feared in a rout early last week following a hike in interest rates — the unwinding can be very ugly. — BLOOMBERG OPINION

The threat of an H5N1 avian flu pandemic

BEN MORELAND-UNSPLASH

The first recent outbreak in the country of the highly pathogenic avian influenza A(H5N1) virus, commonly called bird flu, was reported in February 2022. Since then, outbreaks have been reported in several areas including Manila, Pampanga, Cagayan Valley, Sultan Kudarat, and, most recently, Leyte.

Avian influenza A(H5N1) is widespread in wild birds worldwide and is causing outbreaks in poultry across the globe. The Philippines currently has no confirmed human transmission of bird flu. However, reports of confirmed human infections with bird flu in several countries are spawning fears of a bird flu pandemic.

Bird flu viruses may be transmitted from infected birds to other animals, and potentially to humans, in two main ways, said the US Centers for Disease Control and Prevention (CDC). First, directly from infected birds or from avian influenza A virus-contaminated environments, specifically from exposure to saliva, mucous, or feces from infected birds. Second, through an intermediate host, such as another animal.

While avian influenza viruses do not currently transmit easily from person to person, the ongoing circulation of these viruses in poultry is concerning, as these viruses can result in mild upper respiratory tract infection to severe illness and death, and also have the potential to mutate to become more contagious, warned the World Health Organization (WHO).

Conjunctivitis, gastrointestinal symptoms, encephalitis (inflammation of the brain), and encephalopathy have also been reported in previous human infections with A(H5N1) viruses. Encephalopathy is a group of conditions that cause brain dysfunction that can appear as confusion, memory loss, personality changes, and/or coma in the most severe form.

There have also been a few detections of the bird flu virus in asymptomatic persons who had exposure to infected birds, the WHO said.

The best way to prevent H5N1 bird flu is to avoid sources of exposure whenever possible, stressed the CDC. As a general precaution, whenever possible people should avoid direct contact with sick or dead wild birds, poultry, and other animals and observe them only from a distance.

If one must have direct or close contact with sick or dead wild birds, poultry, or other animals, he or she must wear recommended personal protective equipment (PPE). They should make sure to wash their hands thoroughly with soap and water immediately after. Do not touch surfaces or materials (e.g., animal litter or bedding material) contaminated with saliva, mucous, or animal feces from wild or domestic birds or other animals with confirmed or suspected avian bird influenza A virus infection. It is important not to touch or consume raw milk or raw milk products, especially from animals with confirmed or suspected avian influenza A virus infection.

Travelers to countries with known outbreaks of animal influenza should avoid farms, avoid contact with animals in live animal markets, entering areas where animals may be slaughtered, or contact with any surfaces that appear to be contaminated with animal feces.

Noting that the virus has not acquired mutations that facilitate transmission among humans and based on available information, the WHO assesses the public health risk to the general population posed by this virus to be low and considers the risk of infection for occupationally exposed persons to be low-to-moderate.

Although there are no specific vaccines for preventing influenza A(H5N1) virus infection in humans, several candidate vaccines to prevent H5 infection in humans have been developed for pandemic preparedness purposes, the WHO explained.

The agency stressed that close analysis of the epidemiological situation, further characterization of the most recent viruses (from human cases and animal) and comprehensive investigations around human cases are critical to assess associated risk and to adjust risk management measures in a timely manner. If needed, the WHO committed to reviewing its risk assessment should further epidemiological or virological information become available.

The innovative pharmaceutical industry has played and will continue to play a critical role in pandemic preparedness response. We have a strong track record as a partner contributing knowhow and exploring solutions. During the COVID-19 pandemic, innovation, scaling manufacture, and a socially responsible approach to sharing technology changed the pandemic course in record time.

Drawing from lessons learned from the global response to COVID-19, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) launched the Berlin Declaration. This sets out an approach to more equitable pandemic preparedness and response based on collaboration, commitments, and contributions across the global health community. The industry’s goal is to address issues of equitable access to vaccines, diagnostics, and therapeutics during a global pandemic.

Hopefully, through a coordinated global response, the current avian influenza A(H5N1) outbreak will be contained. The biopharmaceutical industry, on the other hand, will continue to work with global stakeholders to contribute our knowledge and expertise in developing and deploying high-quality diagnostics, therapeutics, and vaccines as quickly as possible when a major health threat is identified.

 

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP). PHAP represents the biopharmaceutical medicines and vaccines industry in the country. Its members are in the forefront of research and development efforts for COVID-19 and other diseases that affect Filipinos.

Yields on government debt end mostly lower

YIELDS on government securities (GS) traded in the secondary market mostly went down last week after the Bangko Sentral ng Pilipinas (BSP) cut benchmark interest rates for the first time in nearly four years.

GS yields, which move opposite to prices, decreased by 3.91 basis points (bps) on average week on week, according to PHP Bloomberg Valuation Service Reference Rates data as of Aug. 16 published on the Philippine Dealing System’s website.

Rates of the 91- and 182-day Treasury bills (T-bills) rose by 10.74 bps and 0.96 bp week on week to 5.9503%, and 6.1152%, respectively. Meanwhile, the 364-day T-bill decreased by 4.88 bps to yield 6.1489%.

At the belly, yields on the two-, three-, four-, five, and seven-year Treasury bonds (T-bonds) dropped by 2.48 bps (to 6.0013%), 3.99 bps (5.9986%), 5.83 bps (6.0011%), 7.57 bps (6.0068%), and 9.57 bps (6.0206%), respectively.

At the long end, the 10-, 20, and 25-year debt papers saw their rates go down by 9.53 bps (to 6.0582%), 5.43 bps (6.2663%), and 5.48 bps (6.2646%), respectively.

GS volume traded was at P82.34 billion on Friday, higher than the P23.13 billion recorded a week earlier.

“Market players started the trading week on the sidelines ahead of key events, namely the seven-year auction, US inflation data releases, and the Bangko Sentral ng Pilipinas’ policy rate decision. Price action remained rangebound going into the Monetary Board meeting. Given mixed signals from policy makers, investors were divided whether the BSP would begin its easing cycle this month,” Lodevico M. Ulpo, Jr., vice-president and head of Fixed Income Strategies at ATRAM Trust Corp., said in an e-mail.

“However, following the BSP’s decision to cut the policy rate by 25 bps to 6.25%, significant buying interest was immediately seen across the curve. With confirmation of another rate cut by yearend, market participants scrambled for bonds until the end of the trading week, driving yields lower by 10 to 20 bps week on week,” Mr. Ulpo said.

The Philippine central bank on Thursday cut benchmark interest rates for the first time in nearly four years to mark the start of a “calibrated” easing cycle amid an improving inflation and economic outlook, with the BSP chief signaling at least one more reduction before the end of the year.

The Monetary Board reduced its target reverse repurchase rate (RRP) by 25 bps to 6.25%. Rates on the central bank’s overnight deposit and lending facilities were also lowered to 5.75% and 6.75%, respectively.

This was in line with the expectations of nine out of 16 analysts surveyed in a BusinessWorld poll.

This was the first time that the Monetary Board reduced rates since November 2020, when it delivered a 25-bp cut amid the coronavirus pandemic.

Prior to the cut, the BSP kept its policy rate at an over 17-year high of 6.5% for six straight meetings following cumulative hikes worth 450 bps between May 2022 and October 2023 to combat inflation.

“With inflation on a target-consistent path, the current macroeconomic outlook supports a calibrated shift to a less restrictive monetary policy stance,” BSP Governor Eli M. Remolona, Jr. said at a briefing.

Mr. Remolona said they could cut rates by 25 bps again within the year. The Monetary Board’s remaining policy-setting meetings this year are scheduled for Oct. 17 and Dec. 19.

Moving forward, GS yields may move sideways with the BSP signaling gradual adjustments, a bond trader said.

“Yields were lower especially after the rate cut confirmation,” a bond trader said in a Viber message. “However, it looks like it will take more catalysts to support a further downside in yields as BSP only sees one more rate cut for the rest of the year, at least for now. GS yields are already trading close to the 6% level, which is the projected RRP rate if the BSP will cut one more time this year.”

“Looking ahead, the peso bond market rally will likely persist in the near-term as local and foreign market players catch up on duration — in preparation for further policy easing from the BSP and the US Federal Reserve. In the absence of significant market catalysts on the domestic front, we expect market participants to continue trading on momentum,” Mr. Ulpo said.

A batch of US data last week showed inflation was moderating and retail spending was robust, Reuters reported.

That has helped the market narrative move away from recession concerns, sparked by a weak US jobs report in early August, to confidence the economy can keep growing. Softer inflation data has also reinforced expectations of an interest rate cut by the US Federal Reserve in September.

On Friday, a survey showed that US consumer sentiment rose in August, driven by developments in the US presidential race, while inflation expectations remained unchanged over the next year and beyond.

With central bankers from around the globe set to gather in Jackson Hole, Wyoming this week, traders expect the Fed to lower borrowing costs from a 23-year high next month but have reduced their bets on an emergency 50-bp cut to 25%, down from 55% a week earlier, the CME FedWatch tool showed. — C.W.E. Laureta with Reuters

EVAP, Chinese officials strengthen ties for EV industry boost

Shaking hands are Electric Vehicle Association of the Philippines Chairman Rommel T. Juan (fourth from left) and Regional Industry Cooperation Committee (RICC) Chairman Xu Ningning. With them are (from left) RICC Liaison Officer Nicole Wang, Philippine Commercial Counsellor Emman Ang, RICC Secretary-General Jennifer Liu, EVAP Chairman Emeritus Ferdinand I. Raquelsantos, and EVAP President Edmund A. Araga. — PHOTO FROM THE ELECTRIC VEHICLE ASSOCIATION OF THE PHILIPPINES

THE ELECTRIC VEHICLE Association of the Philippines (EVAP), represented by Chairman Rommel T. Juan, Chairman Emeritus Ferdinand I. Raquelsantos, and President Edmund A. Araga, recently visited the office of the Regional Comprehensive Economic Partnership (RCEP) Regional Industry Cooperation Committee (RICC) in China. Accompanied by business officials from the Embassy of the Philippines in China, this visit, according to an EVAP release, “marks a significant milestone in fostering cooperation in the electric vehicle (EV) industry between China and ASEAN countries.”

The delegation engaged in discussions with RICC representatives, including Chairman Xu Ningning, Secretary-General Jennifer Liu, and Liaison Officer Nicole Wang. These discussions focused on enhancing collaboration and sharing best practices in EV technology, infrastructure development, and regulatory frameworks. This visit underscores the commitment of EVAP leaders to drive the growth and development of the EV industry in the ASEAN region through strategic partnerships and international cooperation.

Said Mr. Juan, “Our engagement with the RICC is a pivotal step toward strengthening our ties with China and other ASEAN countries. By working together, we can accelerate the adoption of electric vehicles and contribute to a sustainable future.” Added Mr. Raquelsantos, “The exchange of knowledge and expertise between our countries will pave the way for innovative solutions in the EV sector. We are excited about the opportunities this partnership will bring.” Mr. Araga joined, “We look forward to building on this foundation and achieving remarkable milestones in the years to come.”

Mr. Ningning, for his part, stated, “We are pleased to host the leaders of EVAP and are confident that this cooperation will lead to significant advancements in the EV industry. Together, we can achieve mutual growth and sustainability.”

The visit to the RICC office aligns with EVAP’s ongoing efforts to promote the upcoming 12th Philippine Electric Vehicle Summit, which will be held on Oct. 24 to 26 at the SMX Convention Center in Manila. The summit aims to bring together industry leaders, policy makers, and stakeholders to discuss the latest trends, challenges, and opportunities in the EV landscape.