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Ghosts

PHILIPPINE STAR/ MIGUEL DE GUZMAN

It is not Charles Dickens’ Ghost of Christmas Past that has been haunting the so-called justice system. It is the specter of atrocities past and present for which many condemn it as unworthy of the name.

Those “adverse events” include the extrajudicial killings (EJKs), kidnappings, drug trading and other high crimes some police officers have been involved in, but for which they have not been made accountable; the issuance by certain judges of warrants of arrest against independent journalists, political and social activists, and government critics without a whit of evidence for which they have not been disciplined; and the mysterious deaths of high-profile inmates that occur even in the jails that are crammed to the rafters with prisoners in this high-crime country.

All have convinced many that the pursuit of justice is as futile as the hope that the mass of the electorate of these troubled isles will ever elect the leaders that will bring it out of the Stone Age and into the 21st century.

Only last June 25 at the tail-end of the Duterte regime, eight high-profile New Bilibid Prison (NBP) inmates convicted of drug and murder charges were killed by 22 policemen right in the NBP premises. And arguably the most outrageous killing of an inmate was that of Albuera, Leyte Mayor Rolando Espinosa in November 2016 in one of the Bureau of Jail Management and Penology’s (BJMP) provincial jails supposedly because he engaged policemen who were serving him a search warrant in a fire fight.

That story was as full of holes as chicken wire. From where and how did Espinosa get a firearm? And why were the police serving him a search warrant while he was in jail? The attempted answers to those questions were as incredible as any ghost story and have since passed into the dark recesses of State impunity.

And lest we forget, there are the hundreds of prisoners of conscience — political prisoners such as former Senator Leila de Lima — who have been languishing in various detention facilities for years while their trials on fabricated charges proceed glacially, thus underscoring the truth of the adage that justice delayed is justice denied.

There is also the case of some judges’ issuing warrants of arrest left and right without any regard for the evidence or the welfare of their victims, even as the Philippine National Police (PNP) is still under scrutiny for the thousands, among them minors, its operatives killed extrajudicially during the “drug war” and after. Assured by former President Rodrigo Duterte that no matter what they do they would never see the inside of any prison, the perpetrators have either been transferred to other jurisdictions, only charged administratively, or not prosecuted at all.

One of the latest citizens to be convinced that there is something profoundly wrong with the justice system is the brother of slain journalist Percy Lapid who is understandably both outraged and fearful for his and his family’s safety.

Roy Mabasa demanded accountability of the Bureau of Corrections (BuCor) and the resignation of its officials for the suspicious circumstances surrounding the death of one of the “middlemen” in its custody who supposedly contracted and paid the killer of Percy Lapid and his accomplices in behalf of the mastermind behind it. BuCor officials had denied that he was among NBP prisoners. But they then announced that he had died in the NBP hospital on Oct. 18, and claimed that he was using another name, hence their response to PNP inquiries that he was not in Bilibid. Depending on who is speaking to the media, he either died in his cell or in the NBP hospital where he was brought after complaining of shortness of breath.

As incredibly difficult to accept as that tale is, was it merely a coincidence that the middleman died on Oct. 18, the very same date when the surrender of the supposedly “conscience-stricken” gunman to the PNP on Oct. 17 was revealed to the media?

No one can blame Mr. Mabasa for doubting the truth of the convoluted story that is unfolding about his brother’s murder on Oct. 3. He thus went as far as to suggest during an interview with ABS-CBN that getting justice has become impossible in these isles of impunity. In addition to the distinct possibility that the mastermind in the killing of his brother may never be known and prosecuted, what angers him as well is the continuing danger to his family posed by that still scot-free mastermind’s assumed capacity to do them and anyone else harm.

Public reactions echoed his view. Many citizens implied or outrightly declared that while the intent of the various agencies of the justice system seems to be to show that government is determined to get the mastermind(s) in the Lapid murder, what is going on is the usual scripted play that will end in no one’s, except quite possibly the supposed gunman’s, being prosecuted and imprisoned.

One suspects that the same view of the justice system is shared by millions of Filipinos whose own experience or that of their friends, neighbors and kin validate their skeptical reaction to such assurances as that those guilty of this or that crime will be found and punished without fear or favor. The wealthy, powerful, and well-connected who have been convicted of such crimes as plunder are after all even in government, while those accused of the pettiest crimes are immediately hauled off to jail where many have been in detention without having been tried and convicted.

Every study on what issues are most important to the citizens of this country has established their concern for justice as crucial to their lives and therefore their regard for government. They may not state the need for it in so many words, but justice, they correctly assume, is the foundation of civilized society and is at least as important as education, medical care, and having a roof over one’s head and food on the table. It has even been argued that the hankering for justice has tipped the balance in favor of fundamental changes — even revolutions — in government, politics and society during periods of crisis.

The killing of journalists and media workers in the Philippines — 197 so far since 1986 — has underscored the imperative of putting an end to them not only to reverse the country’s reputation as among the most dangerous places in the world to be a journalist. It is even more important in providing the conditions in which press freedom and free expression may flourish as rights indispensable to the resumption of the democratization and development process that past regimes such as the Marcos Sr. dictatorship and the Duterte despotism hindered and undermined.

The Percy Lapid case is both a challenge to, and an opportunity for, the stewards of the justice system to demonstrate in deeds the truth of their claims that all the system components — the police, the courts and the prisons — are working. Otherwise the ghosts of Kian delos Santos and the thousands of presumably innocent victims of extrajudicial killings in the “drug war;” the shameful use of judicial power against those who dare exercise their right to free expression; the persecution, intimidation and harassment of journalists by State agencies; and the killings that occur even in the country’s jails will continue to haunt the justice system as undeniable indicators of its failure to function as it should by prosecuting and punishing the guilty and protecting and exonerating the innocent.

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

Central banks: pivoting or wimping out?

FREEPIK

Yes, as early as May 2020, Nouriel Roubini, Dr. Doom to both fans and detractors, in one of the Odd Lots podcasts, had already warned that any economic recovery from the pandemic would be, as Bloomberg described it, “followed by a period of high inflation owing to a combination of supply shocks and aggressive easing.”

Today, he is predicting that central banks, seeing both the market and economic pains caused by the huge interest rate increases, might reverse course, pivot to some, and eventually surrender their monetary goal of defeating this stubborn global inflation. Roubini would rather use “wimping out,” this central banks’ propensity to change their stance in midstream even before the mission is accomplished.

Very few would be prepared to argue against Roubini’s dark prognosis because it is a tale that seems to connect all the dots through all the global uncertainties and volatilities combined.

For instance, New Zealand’s Graeme Wheeler and Bryce Wilkinson in their July 2022 analysis put the blame for ultra-high inflation on ultra-easy monetary policy of central banks which were faced by the contractionary consequences of the pandemic lockdown. But Wheeler and Wilkinson also debunked the claim of many policymakers that inflation is of exclusively global origin given the disrupted global supply chain due to the virus and Russia’s invasion of Ukraine as it pushed key commodity prices to the sky. If it were true, the inflation rates in China, Japan, Switzerland, Saudi Arabia, and many Asian countries would be as high as the others. But they are not.

As they said, central banks committed errors of judgment and the Russian factor simply accentuated the build-up in price pressures. The US Fed, and for that matter, many central banks in the region including here, might feel alluded to because many of them thought, and they were proven incorrect, the inflationary pressures were simply transitory. Some monetary authorities even championed the cause of keeping low interest rates far longer than necessary until they saw clearer evidence of second-round effects, or inflation being more entrenched, as if leading indicators are not scientific enough.

What makes matters worse is that central banks violate their own rules of engagement. Some would always attest they are forward-looking in conducting monetary policy. Yet even as their own forecasts are showing higher-than-target outcomes, they would prolong their monetary accommodation. It looks like they have become oblivious of their primary mandate which is to promote and preserve price stability. Thus, the current BSP governor was right when he said that price stability, and not growth, is the mandate of the BSP. Economic growth could be a guidepost of monetary action because not all inflation undermines growth.

We sympathize with Dr. Raul Fabella who saw a policy dilemma in the choice of “whether to go for growth first and inflation taming later, or inflation taming first and growth later?” But for central banks with price stability objective, there is singularity of goal. Inflation busting is their mission order, their primary responsibility. In the Philippines, it is no less than the 1987 Philippine Constitution that mandates the BSP to maintain price stability conducive to a balanced and sustainable growth of the economy and employment. Keeping prices stable is expected to lead to good trajectory of growth and employment. Its own charter as amended by Congress even strengthened the BSP’s capability to do its job as an independent monetary authority. 

We don’t even see a policy dilemma here because the economy is far from recession, whether this year or the next, at least based on what the Government is projecting in terms of a 6.5%–8.5% growth range. The policy issue is no longer to tighten or loosen monetary policy, but to what extent and for how long do we tighten the screw.

A whole-of-government approach is therefore needed because of the multifaceted nature of this crisis. With the BSP manning the monetary levers, the rest of the Government ought to mind and do their own share of lifting all the boats whether small or big. We should cover all grounds instead of choosing one against the other, or doing one now and doing the other later.    

What complicated the job of central banks, including the BSP, is what the New Zealand public sector economists described as a case of overdoing interest rate cuts in 2020 and 2021, and their failure to promptly exit from ultra-easy monetary policy. Like in the US, many labor markets in both advanced and emerging markets succeeded in recovering from their double-digit unemployment during the peak of the pandemic. This, plus the creeping inflationary pressures from the global oil market, the disruption in the global value chains and the emerging second-round effects should have alerted the monetary authorities all over the world to initiate their exit strategy earlier. 

As a result, central banks are now playing catch up in a big way, and paying higher interest on the banks’ excess reserves due to previous ultra-easy monetary policy including, in the case of the Philippines, reduction in the required reserves and purchases of government securities from the secondary market. These alone infused more than a trillion pesos into the money stream.

How central banks blundered in their conduct of monetary actions is traced on one, their overconfidence in their monetary policy framework and models; two, their overconfidence in their ability to fine-tune economic activity; three, their distraction from their primary responsibility of keeping prices stable instead of branching out to other roles not too central to their mandate; four, their notion that they have dual roles. It was also suggested that perhaps, some central banks might have also pandered to political objectives of those in authority when science and independence should have prevailed in monetary policy decisions.

There has been no lack of voices in the wilderness. Former US Treasury Secretary Larry Summers in February 2021 also warned central banks and governments by questioning the US’ $1.9 trillion pandemic response. At the time, Summers predicted: “There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation.” As we wrote in our column last April 21, 2022, US inflation then stood below 2.0%. In March 2022, inflation skyrocketed to 8.54%. Summers advocated quick, immediate and decisive monetary tightening. Unfortunately, many central banks balked at the idea. It was not good for growth, it was not good for politics. Today, with high inflation, consumption and investment expenditures have been both emasculated. This is far from solving a policy dilemma; central banks had made their choice and the world is poorer because of it. Central bank independence has been weakened.

That is precisely Roubini’s beef against many central banks. For him, given this situation, the optimal response is to avoid de-anchoring of inflation expectations. This is a mouthful of theory because this means, central banks should resolve the issue of the so-called time inconsistency of their policy, that when they are expected to do the right thing, they would do it with dispatch. This is the reason central bankers should always be discrete before they conduct open mouth operations. This is the reason why clear forward guidance is treated like another monetary instrument.  Otherwise, society will be suspicious of their competence and credibility. That is how to lose the fight against inflation.

Given the suggested optimal choice, Roubini sees two problems. One, because monetary policy should sustain their tightening stance, recession becomes unavoidable. And two, because the Government needs to spend, and spend big, financial and debt crisis will not be far behind. With Roubini’s economic crash coupled with financial crash, central banks will need little convincing that the path of least resistance is to accommodate public debt. Summers’ vision of stagflation is therefore complete with central banks wimping out.

Let us all wish and pray that the Philippines is not among those of Roubini’s two-thirds of emerging markets which “have these types of economic and financial fragility” that could exacerbate his perfect storm. Wimping out for the central bank is not an option.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

If vaccines couldn’t stop COVID transmission, then why were they almost made mandatory?

PHILIPPINE STAR/ MIGUEL DE GUZMAN

On 12 October, Dutch Member of the European Parliament Rob Roos tweeted a clip showing Pfizer President of International Markets Janine Small admitting, with a chuckle, that: “Regarding the question around whether we knew about stopping immunization before it entered the market, no.”

In other words, before Pfizer released its COVID vaccines to the public, it actually never tested whether such vaccine could actually stop the transmission of the virus. Mainstream news media, predictably, went into hyperdrive in “fact-checking” the supposed admission.

One assertion was that Small never made such admission. But the exchange was on video. Besides, Pfizer’s Director of Corporate Affairs Christina Antoniou in writing also admitted that: “The BNT162b2 (Comirnaty) trials were not designed to evaluate the vaccine’s effectiveness against transmission of SARS-CoV-2.”

Another defense to protect the vaccine narrative was to allege that Pfizer from the beginning never claimed that the vaccine could stop transmission. But this is belied by Pfizer itself having tweeted that its vaccine has been “authorized for emergency use to prevent COVID-19 in individuals” (26 January 2021) and that the “ability to vaccinate at speed to gain herd immunity and stop transmission” (14 January 2021).

Furthermore, various political leaders, from US President Joe Biden (13 May 2021 and 21 July 2021) to Canadian Prime Minister Justin Trudeau (6 October 2021; also, the Canadian government website declared that “vaccination is one of the most effective ways to protect our families, communities and ourselves against COVID-19”), to news personalities like Rachel Maddow (29 March 2021) and infectious disease “expert” Dr. Monica Gandhi (20 March 2021), and — of course — Dr. Anthony Fauci (17 May 2021 and 2 June 2021) — all also claimed that getting vaccinated would protect one from being infected with COVID.

Besides, if it were true that COVID vaccines were never really expected to stop transmission of the COVID virus, then why was the COVID vaccine vehemently pushed to be made mandatory, for people’s employment and education and travel conditioned upon them being vaccinated? As Roos correctly pointed out: vaccine “passports and mandates placed millions of people outside society” without even any “evidence the vaccine would even stop the transmission.”

Finally, vaccine defenders allege that the point of a COVID vaccine is not to stop transmission (which, to reiterate, contradicts their entire vaccine marketing and advocacy push back in 2020 and 2021) but rather to mitigate the effects of the virus, i.e., to prevent serious illness from COVID. But this is belied by a) data showing that vaccinated people still get seriously or critically ill, even die, from COVID; b) growing reports of serious adverse effects from the vaccine; and c) admissions or studies showing the low lethality of COVID.

Of the latter, Moderna CEO Stephane Bancel admitted that COVID is “going to be very similar to flu” (interview at the 2022 Yahoo Finance All Markets Summit, as well as “Moderna CEO Now Admits COVID-19 is Like Seasonal Flu – Says Only the Vulnerable Need a COVID Booster Shot,” Gateway Pundit, 18 October 2022).

More damningly, known epidemiologist Dr. John Ioannidis and his colleagues (“Age-stratified infection fatality rate of COVID-19 in the non-elderly informed from pre-vaccination national seroprevalence studies,” 13 October 2022) recently found that the COVID infection fatality rate (IFR) in non-elderly people was quite low and this was even before vaccination started:

So, we now have a picture of a vaccine unable to stop transmission, uncertain in whether it can mitigate serious or critical illness from COVID, for a virus with quite low fatality rate, and yet — as cardiologist Dr. Aseem Malhotra pointed out — could result in serious adverse effects: “Until proven otherwise, it is likely that COVID mRNA vaccines played a significant or primary role in all unexplained heart attacks, strokes, cardiac arrhythmias and heart failure since 2021” (“Curing the pandemic of misinformation on COVID-19 mRNA vaccines through real evidence-based medicine — Part 2,” September 2022).

Which leads to this emphatic reiteration: it is not true (as was reported in media) that “public officials and employees, contractors, manufacturers, volunteers, and representatives of duly authorized private entities” are free from liability and cannot be sued for actions in relation to the “administration or use of a COVID-19 vaccine.” RA 11525 actually provides that they can be sued and held liable if proven that they acted with “willful misconduct and gross negligence” in using or administering COVID vaccines.

In fact, RA 11525 even set aside P500 million as compensation for any person “inoculated through the COVID-19 Vaccination Program” and because of it suffered “severe adverse effects” including “death, permanent disability or hospital confinement.”

Filipinos (or their family members) that suffered serious adverse effects arising from COVID vaccination are strongly encouraged to document their experiences and claim government compensation, or (as provided by law) prosecute and hold accountable those that forced or misled people into taking the COVID vaccines.

 

Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence

www.facebook.com/jigatdula/

Twitter @jemygatdula

The insect apocalypse is coming to your neighborhood

THOMAS SHAHAN/FLICKR/CC BY-NC-ND 2.0

AN UNUSUALLY large influx of tiny insects called aphids have been sucking on Dallas-area pecan trees in recent weeks. After they’ve had their fill, they “excrete” the waste out their back ends and onto cars, driveways and sidewalks. “Texas is covered in a sticky, icky goo,” declared a Dallas Morning News headline. Other news outlets offered tips on how to clean up the mess.

It’s not just Texans who should be grossed out. Scientists who study the relationship between insects and plants have long predicted that a warming climate would benefit aphids and other plant-eating pests. The Texas drought, which occurs as the state experiences rising temperatures under the influence of climate change, is just one example. Elsewhere, surging populations of plant-eating insects are disrupting farms and the food supply chain, causing problems far more serious than sticky windshields.

Discussions around climate change and its impact on animals is often limited to large, charismatic species like polar bears and sea turtles. Butterflies and pollinators might earn mentions, but generally insects get far less attention than species that translate easily into stuffed animals. That’s an understandable but grave oversight that needs to change if we want to have a chance at mitigating hundreds of billions of dollars in potential losses.

Insects, unlike sea turtles, provide services critical to the functioning of the environment and human societies. According to a 2015 study, 5% to 8% of global crop production — worth as much as $577 billion — is dependent on pollination. A less obvious but no less important service is the processing of dung into fertilizer, a function that’s performed by many organisms. A recent study suggests that the dung-eating services provided by just one, the simple dung beetle, saves the US cattle industry around $380 million in dung recycling services annually. Other ecosystem services provided by insects, including pest control, are far more difficult to price. Forensic entomology, the science of using insects to investigate crime-scene deaths, is highly dependent upon decades of data on corpse decomposition rates pegged to specific temperatures. And what price would Texans pay for a swarm of aphid-eating ladybugs to stop the goo?

Alas, these crucial organisms are facing what some prominent scientists have recently started calling the “insect apocalypse.” Last year, a group of scientists estimated that insect abundance is declining by 1% to 2% a year due to a range of stressors, including insecticides, herbicides and climate change. This year, a different study assessed samples of nearly 20,000 different insects and found a 63% decline in insects in climate-stressed agricultural areas where most natural habitat has been removed (removal of trees intensifies heating effects, among other problems). Another recent study found that the rising frequency of unusually hot days in North America and Europe is contributing to higher local bumblebee extinction rates. And in forensic entomology, a growing body of research suggests that disappearing and migrating insect species — such as the blowfly — are undermining the usefulness of the investigative method, potentially hindering law enforcement.

Not every insect species will suffer losses due to a changing climate, and many that won’t are precisely the kinds of bugs that humans would rather do without. Many pests, especially the varieties that feast on crops, are beneficiaries of climate change. In 2013, scientists observed that the home ranges of many pests have been shifting toward historically cooler regions since at least 1960. That shift continues. Scientists estimated this year that a warmer climate was contributing to a 70% expansion in the US habitat for the brown marmorated stink bug, a common and destructive agricultural pest.

Greater amounts of precipitation generated by warming oceans is also affecting harmful bug populations. For example, over the last 15 years the western Indian Ocean has experienced historically powerful cyclones. In 2019 and 2020, the rain from those events created ideal conditions for locusts to breed, hatch, develop and, ultimately, damage hundreds of thousands of acres of sorghum, corn and wheat in Ethiopia, alone.

There are also more subtle means by which climate change can promote pests and the destruction of economically significant plants. One study found that increases in temperature were accompanied by an increase in the numbers of Maize Stem Borers, a pest common in parts of Africa, and a decrease in the parasites that feed on them. That disconnect, in turn, led to greater devastation of corn crops. Drought, such as what Texas has faced, can weaken a plant’s natural defenses, thereby attracting pests, while higher CO2 levels can decrease the nutritional value of plants. “If insects face a plant that won’t give them all the nutrients they need, they’ll consume more,” explained Esther Ndumi Ngumbi, an assistant professor of entomology at the University of Illinois. “That’s another unfortunate side-effect of drought,” said Ngumbi, who studies the relationship between plants and insects and spoke to me by phone.

Her research is also focused on the impacts of pests on farmers, and she’s been troubled by what she’s observed, especially among small farmers in emerging markets. “A Kenyan farmer works one acre of land. If insects come, if drought comes, that takes away their crop, which means they can’t provide for their family.” In more developed regions, the farms are larger, but the impacts are still significant, especially as consumers face higher inflation.

Research efforts to develop and disseminate — for free — drought-resistant crops is a critical step to addressing the growth of pests on farmlands. But that’s a longer-term process. For now, Ngumbi would like to see a global effort to better monitor for pests and notify farmers before they migrate onto their lands. In addition, she and others argue that crop diversification, rather than single-crop monocultures, can help to slow pests.

None of these steps can reverse climate change’s impacts on insects. But they can prepare humans for the consequences that are already happening and inspire long-term thinking about adaptation. If we’re not talking about it then we’re not going to be doing anything about it, and doing nothing will only benefit the pests. That should bug everyone.

BLOOMBERG OPINION

 

Adam Minter is a Bloomberg Opinion columnist covering Asia, technology and the environment. He is author, most recently, of Secondhand: Travels in the New Global Garage Sale.

Mexico City govt joins Airbnb to lure ‘digital nomads,’ despite rising rent fears

AIRBNB.COM

MEXICO CITY — Mexico City’s mayor said on Wednesday she wants to boost the number of “digital nomads” in the capital after signing an agreement with short-term rental platform Airbnb, despite fears the influx is pricing residents out of the rental market. 

Asked about complaints over rising rents during a press conference, Mayor Claudia Sheinbaum said the local administration has not seen a direct link between rental prices and Airbnb’s presence. 

Ms. Sheinbaum said most digital nomads — people working online remotely rather than in an office, often in another country — choose to stay in expensive neighborhoods, where the rent is already higher than other areas of the capital, such as Condesa, Roma, and Polanco. 

“We do not want rents to skyrocket in the face of this situation,” she said, adding that her administration will keep monitoring the situation. 

Airbnb could not be immediately reached for comment. 

Average daily rates for short-term rentals across Mexico City jumped 27% to $93 in August 2022 compared with the same month in 2019, data from market research company AirDNA shows. 

Housing activists and some researchers have said the digital nomad influx stokes inflation and transforms neighborhoods into expatriate bubbles, in a city well-known for stark divides between rich and poor. 

Airbnb is also opening its platforms for Mexican residents to create tourism experiences around their daily activities, according to Ms. Sheinbaum. 

The partnership between Mexico City’s government and Airbnb is also backed by UNESCO, United Nations’ cultural Agency. — Reuters

Meta stock craters over bleak forecast and expensive metaverse bets

Meta CEO Mark Zuckerberg. Image via Meta.

Facebook parent Meta Platforms Inc. on Wednesday forecast a weak holiday quarter and significantly more costs next year, sending shares down nearly 20% as investors voiced skepticism about the company’s pricey metaverse bets. 

The forecast knocked about $67 billion off Meta’s stock market value in extended trade, adding to the more than half a trillion dollars in value already lost this year. 

If Meta’s after-hours stock rout is matched in Thursday’s trading session, it will have been its deepest one-day loss since Feb. 2, when the company last issued a dismal forecast. 

The disappointing outlook comes as Meta is contending with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation. 

Executives announced plans to consolidate offices and said Meta would keep headcount flat through the end of 2023. 

Revenue fell 4% in the third quarter ended Sept. 30. That deepened a revenue decline begun the previous quarter, when the company posted a first-ever revenue drop of 0.9%, although it was less steep than the 5.6% decline Wall Street had expected, according to IBES data from Refinitiv. 

More troubling was the company’s estimate that fourth-quarter revenue would be in the range of $30 billion to $32.5 billion, mostly under analysts’ estimates of $32.2 billion, according to the Refinitiv data. 

Meta also forecast that its full-year 2023 total expenses would be $96 billion to $101 billion, significantly higher than a revised estimate for 2022 total expenses of $85 billion to $87 billion. 

That includes an estimated $2.9 billion in charges over the course of both 2022 and 2023 from the office downsizing. 

It also forecast that operating losses associated with the Reality Labs unit responsible for its metaverse investments would grow in 2023 and pledged to “pace” investments after that. 

Total costs for the third quarter came in above estimates at $22.1 billion, compared with $18.6 billion the year prior. 

‘EXPERIMENTAL BETS’
Meta is carrying out several overhauls of its apps and ads products to keep its core business pumping out profits, while also investing $10 billion a year in a bet on metaverse hardware and software. 

Chief Executive Mark Zuckerberg has said he expects the metaverse investments to take about a decade to bear fruit. In the meantime, he has had to freeze hiring, shutter projects and reorganize teams to trim costs. 

An analyst on the investor call told Mr. Zuckerberg investors were worried that the company had taken on “just too many experimental bets” and asked the chief executive why he believed his gambles would pay off. 

Meta executives defended the spending, saying most of the company’s expenses were still going toward the core business, including investments in more expensive AI-related servers, infrastructure and data centers. 

Mr. Zuckerberg added that he expected the metaverse work to provide returns over time. 

“I appreciate the patience,” he said. “And I think that those who are patient and invest with us will end up being rewarded.” 

Mr. Zuckerberg said plays of Meta’s TikTok-like short-video product Reels now number more than 140 billion across Facebook and Instagram each day, up 50% from six months ago, and its revenue run rates are now $3 billion annually. 

He believes Reels is gaining against rival TikTok, he added, with Reels being reshared more than 1 billion times a day. 

Meta also posted user growth figures roughly in line with expectations, including a year-over-year increase of monthly active users on flagship app Facebook. 

“The worry for Meta is that this pain is likely to continue into 2023 as cost headwinds remain a real challenge and the strong dollar impacts on overseas earnings,” said Ben Barringer, equity research analyst at Quilter Cheviot. 

“Given revenues were down at a time when costs have grown significantly, modest user growth and impressions simply isn’t going to bail you out.” 

Net income in the third quarter fell to $4.40 billion, or $1.64 per share, from $9.19 billion, or $3.22 per share, a year earlier, its worst showing since 2019 and the fourth straight quarter of profit decline. 

Analysts had expected a profit of $1.86 per share. — Reuters

Data privacy rights stronger after Cambridge Analytica scandal

LONDON — Five years after the Cambridge Analytica scandal involving Facebook, digital rights activists David Carroll and Brittany Kaiser said major steps have been taken towards consumers securing the right to own their data. 

The consulting firm Cambridge Analytica illegally used private data, harvested from 87 million Facebook users, to persuade undecided US voters in 2016 to back Donald Trump in the presidential election, and to sway British voters to leave the European Union. 

“The Cambridge Analytica scandal created an awareness around these issues because we finally imagined a threat to elections and democracy,” said Mr. Carroll, a US academic, at the Thomson Reuters Foundation’s annual Trust Conference on Wednesday. 

This comes amid one of the latest major data privacy flashpoints, with fears that women in the United States seeking an abortion could be tracked down due to their online activity, after the Supreme Court overturned Roe v. Wade. 

Mr. Carroll went to court in Britain to force Cambridge Analytica to hand over all of the personal information it held on him, in a legal battle that was documented in the 2019 Netflix film The Great Hack. 

He won his case but Cambridge Analytica had already filed for insolvency and he was unable to access all of his data. 

Since the release of the documentary, consumer data protection has improved in the United States with five states enacting comprehensive privacy laws, said Mr. Carroll, an associate professor at Parsons School of Design in New York. 

California passed a law in 2018 that gives residents the right to see the specific pieces of personal data that a company has collected on them and request their data be deleted from e-commerce websites and social media. 

“(The Cambridge Analytica scandal) harnessed this public anxiety and created a voter upswell that forced Sacramento to make a law that would previously be inconceivable, in its progressive way to regulate its most important, arguably, business,” Mr. Carroll said. 

Ms. Kaiser, a former Cambridge Analytica staffer-turned-whistleblower, who testified in a 2018 British parliamentary inquiry into fake news and misinformation, said digital literacy has improved since the scandal broke. 

“I hear people say when I saw The Great Hack, it was the first time that I thought about how my data is being used and the first time I thought I should do something to protect myself,” said Kaiser, who went on to found the Own Your Data Foundation, which campaigns for increased transparency. 

“I see a whole new generation of people who actually care and are thinking about the ways that they use technology. We now see schools that are implementing digital literacy education at a national level.” — Thomson Reuters Foundation

Pentagon successfully flight tests hypersonic weapon components

NASA Wallops/Allison Stancil
NASA Wallops/Allison Stancil

WALLOPS ISLAND, Va. — The US Navy and Army blasted off a rocket from a seaside launch pad in Virginia to test nearly a dozen hypersonic weapon experiments on Wednesday to help develop the new class of weapon, the Pentagon said, calling the test successful. 

Sandia National Laboratories ran the test from NASA’s Wallops Flight Facility in Virginia, which evaluated hypersonic weapon communications and navigation equipment as well as advanced materials that can withstand the heat in a “realistic hypersonic environment,” according to a Navy statement. 

Hypersonic glide vehicles are launched from a rocket in the upper atmosphere before gliding to a target at speeds of more than five times the speed of sound, or about 3,853 miles (6,200 km) per hour. 

The United States and its global rivals have quickened their pace to build hypersonic weapons — the next generation of arms that rob adversaries of reaction time and traditional defeat mechanisms. 

To speed the development the Pentagon launched these experiments and prototypes using a sounding rocket, a smaller and therefore more affordable test vehicle, to fill a critical gap between ground testing and full-system flight testing. 

Wednesday’s test was intended to validate future aspects of the Navy’s Conventional Prompt Strike (CPS) and the Army’s Long Range Hypersonic Weapon (LRHW). 

Glide bodies are different from their air-breathing hypersonic weapon cousins, which use scramjet engine technology and the vehicle’s high speed to forcibly compress incoming air before combustion to enable sustained flight at hypersonic speeds. 

Companies such as Lockheed Martin Corp and Raytheon Technologies Corp are working to develop US hypersonic weapon capability. — Reuters

World Bank projects 11% energy price decline in 2023

REUTERS

WASHINGTON — The World Bank on Wednesday said it expects energy prices to decline by 11% in 2023 after this year’s 60% surge following Russia’s invasion of Ukraine, although slower global growth and coronavirus disease 2019 (COVID-19) restrictions in China could lead to a deeper fall. 

The bank in its latest Commodity Markets Outlook projected a Brent crude average price of $92 a barrel in 2023, easing to $80 in 2024 but well above the five-year average of $60. 

It said Russia’s oil exports could drop by as much as 2 million barrels per day due to a European Union embargo on Russian oil and gas products, coupled with restrictions on insurance and shipping, that are to take effect on Dec. 5. 

A proposed Group of Seven oil price cap could also affect the flow of oil from Russia, but needed the participation of large emerging markets and developing countries to be effective, it said, calling the mechanism “untested.” 

The World Bank said the stronger dollar — and the shrinking value of the currencies of most developing economies — had driven up food and fuel prices that could aggravate the food insecurity already affecting 200 million people worldwide. 

“The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,” said Ayhan Kose, who heads the World Bank group that produces the report. 

He said emerging market and developing economies should brace for “a period of even higher volatility in global financial and commodity markets.” 

Currency depreciation meant that almost 60% of oil-importing emerging markets and developing economies saw an increase in domestic currency oil prices from Russia’s invasion of Ukraine, which began on Feb. 24, the report found. 

Nearly 90% of these economies also saw a larger increase in wheat prices in local currency terms, it said. 

Food price inflation averaged more than 20% in South Asia in the first three quarters of 2022, while other regions, including Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, and Eastern Europe and Central Asia, averaged food price inflation of between 12% and 15%. 

While energy prices were easing, they would still be 75% above their average over the past five years, the bank said. 

Both natural gas and coal prices are projected to decline in 2023 from record highs in 2022, but Australian coal and US natural-gas prices are still expected to be double their average over the last five years by 2024. European natural gas prices could be nearly four times higher, it said. 

Coal production, meanwhile, was increasing significantly, as major exporters boosted output, putting climate-change goals at risk. — Reuters

Sept. budget deficit slightly narrows

PHILIPPINE STAR/ MICHAEL VARCAS

By Luisa Maria Jacinta C. Jocson, Reporter

THE National Government’s budget deficit slightly narrowed in September, as revenue growth outpaced expenditures, the Bureau of the Treasury (BTr) said on Wednesday.

The BTr’s cash operation report showed the budget gap stood at P179.8 billion in September, down 0.61% from P180.9 billion a year earlier. However, this was more than double the P72-billion fiscal deficit in August.

Total revenues rose by a quarter to P288.8 billion from P231.45 billion a year ago, as tax and nontax collections grew by double digits.

National Government fiscal performanceTax revenues went up by 18.6% to P253.3 billion in September. The bulk came from the Bureau of Internal Revenue (BIR) which collected P173.6 billion, up 12.6% year on year. Bureau of Customs (BoC) collection jumped 37.7% to P79.3 billion.

Nontax revenues surged 98.9% to P35.6 billion, thanks to the 30.29% rise in BTr revenues to P7.3 billion.

“The improvement resulted mainly from higher government share from Philippine Amusement and Gaming Corp. (PAGCOR) profit, BTr managed funds and interest on government deposits,” the Treasury said.

Meanwhile, expenditures rose by 13.63% to P468.6 billion from P412.4 billion in 2021.

“This was driven mainly by higher capital expenditures, national tax allotment of local government units, and interest payments, alongside the subsidy releases to the PhilHealth for the National Health Insurance program,” the BTr said.

National tax allotments to LGUs jumped by 43.2% to P95.8 billion, while interest payments rose by 25.1% to P59.9 billion and subsidies surged by 157.6% to P23.7 billion.

Analysts attributed the continued growth in revenues to increased economic activity and mobility restrictions amid a coronavirus pandemic.

“There has been a considerable uptick of total revenues this year and it has consistently outpaced expenditure growth,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail. “This is due to the reopening of the economy and the economic activity growth that went along with it. Nevertheless, we still observed a moderate fiscal stimulus from the National Government, while the double-digit growth of revenues continued.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the absence of lockdowns and the Marcos administration’s priority on fiscal discipline reduced the government financial assistance.

“Large lockdowns in the past have proven to be costly for the government that led to wider budget deficits that, in turn, led to large government borrowings,” he said in a text message.

Mr. Ricafort said elevated inflation, the weaker peso and higher interest rates could increase state spending.

Mr. Asuncion said rising interest rates are also putting pressure on the government to tighten spending.

“This is why we see financing efforts such as dollar denominated bonds and planned dollar retail Treasury bonds in spite of rising revenues. We think that the National Government is making sure that it has enough to sustain spending and fund the budget deficit moving forward,” he added.

NINE-MONTH GAP
For the first nine months of the year, the fiscal deficit narrowed to P1 trillion, 11.09% lower than the P1.14-trillion gap a year ago, and 20.47% behind the year-to-date goal of P1.3 trillion “due to higher receipts and slower expenditure growth.”

Total revenues jumped by 18.79% to P2.7 trillion in the nine-month period, accounting for 80% of the P3.3-trillion full-year program.

Tax collection rose by 17.48% to P2.4 trillion, while nontax revenues increased by 31.55% to P272.6 billion.

The BIR collected P1.7 trillion, up by 12.29% year on year but fell 1.99% short of its P1.8-trillion year-to-date goal.

Customs collections went up by 35.89% year on year to P638.5 billion, and exceeding the P542.2-billion year-to-date target by 17.76%.

The BTr’s cumulative income of P129.7 billion also exceeded the P61.2-billion full-year program.

On the other hand, nine-month expenditures went up by 8.71% to P3.7 trillion, still 1.86% lower than the nine-month program.

“Nonetheless, this narrowed down from the 3.04% or P75.4-billion program gap during the first semester of this year, indicating the gradual catching-up of agency disbursements,” the BTr said.

Primary expenditures rose 7.68% to P3.3 trillion, but 1.7% lower than the year-to-date target.

Interest payments increased 17.87% to P400.0 billion, but 2,88% below the target.

To date, the National Government has already disbursed 74% of the P5 trillion full-year program.

The government aims to reduce the deficit to 7.6% of GDP this year, bringing it down to 3% of GDP by 2028.

August infrastructure spending inches up

PHILIPPINE STAR/EDD GUMBAN

INFRASTRUCTURE SPENDING rose by an annual 4% in August as the Marcos administration ramped up the implementation of projects, the Budget department said.

The Department of Budget and Management (DBM) in a report said expenditures for infrastructure and other capital outlays increased to P73.7 billion in August, from P70.9 billion a year ago.

However, the August figure was 4.4% lower than the P77 billion spent in July.

The DBM said the government accelerated the implementation of infrastructure projects and other construction activities to meet the Department of Public Works and Highways’ spending targets for the year.

“Processing of payments for right-of-way claims nationwide also contributed to the higher infrastructure outlays in August this year,” it added.

The DBM said the growth in expenditures was partially offset by one-off payments in August 2021 for various railway projects of the Department of Transportation (DoTr), including the Metro Manila Subway project, the Malolos-Clark railway project and the Metro Rail Transit Line 3 rehabilitation project.

In the eight months to August, infrastructure spending stood at P628.6 billion, up by 10.2% from the P570.4 billion a year ago.

“Overall infrastructure spending is expected to remain positive but muted as the National Government attempts to limit the impact on the deficit and the overall debt,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a Viber message.

The country’s relatively high debt-to-gross domestic product (GDP) ratio gives fiscal authorities limited space “to deliver a substantial boost in terms of spending, Mr. Mapa added.

The debt-to-GDP ratio eased to 62.1% at the end of June, lower than 63.5% as of end-March. The government is targeting to bring down the ratio to 61.8% by end-2022.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said it is misleading to assess growth on mere spending.

“These expenditures are non-recurring expenditures that are dependent on various government actions unrelated to funding, such as efficient right-of-way processes and determined leadership in different agencies,” he said in an e-mail.

However, Mr. Ridon said spending growth is a “promising” sign. “The government will strive to avoid delays in infrastructure implementation, unlike the previous administration’s record of massive delays in its infrastructure projects,” he added.

Ateneo de Manila University Economics professor Leonardo A. Lanzona said infrastructure is “an acceptable program for recovery if it leads to more jobs.”

“Judging from experience recently where infrastructure has been the main program for growth, this does not seem to be the case as a significant portion of the population are still feeling adverse effects of the pandemic,”  he said. “It may not be wise to focus on infrastructure whose benefits are gained only in the long run, if any.” — Luisa Maria Jacinta C. Jocson

PHL rule of law improves but among worst in region

Members of the Philippine National Police (PNP) prepare their shields along Commonwealth Avenue in Quezon City during the President’s State of the Nation Address, July 25. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Kyle Aristophere T. Atienza, Reporter

RULE OF LAW in the Philippines slightly improved this year, but remained one of the worst in the East Asia and Pacific region, according to a report by the international civil society organization World Justice Project (WJP).

With an overall score of 0.47 out of 1, the Philippines improved five places to 97th out of 140 countries in the 2022 edition of WJP’s Rule of Law Index.

The Philippines was among the few countries to see a rise in their score this year, WJP said in a statement, noting that adherence to the rule of law fell in 61% of countries.

Philippines climbs to 97th out of 140 countries in WJP’s Rule of Law Index

However, the Philippines was one of the worst in the region, ranking 13th out of 15 countries in East Asia and the Pacific, ahead only of Myanmar and Cambodia.

Globally, Denmark, Norway and Finland were the top three performers, while New Zealand, Australia and Japan were best in the region. Venezuela, Afghanistan and Cambodia had the lowest scores.

The Philippines ranked 16th out of 38 lower middle-income countries.

While the world is emerging from the pandemic, “the global rule of law recession continues,” WJP said.

Authoritarian trends even before the pandemic such as weaker checks on executive power and increased attacks against the media significantly led to the erosion of rule of law globally, it said.

But the decline in scores was less extreme than last year, when the pandemic disrupted justice systems and governments “exercised emergency powers that curtailed civic freedoms and bypassed transparency mechanisms,” it said.

The index measured rule of law based on global surveys of more than 154,000 households and 3,600 legal practitioners and experts.

The Philippines scored the lowest in criminal justice and fundamental rights, but had slight improvements.

Its scores in constraints on government powers, absence of corruption, open government and regulatory enforcement were stagnant.

There was a small improvement in order and security, which measures “how well a society ensures the security of persons and property.”

The Philippines, one of the oldest democracies in Asia, was ranked 102nd out of 139 countries in 2021, dropping 51 spots in six years under former President Rodrigo R. Duterte.

“The results of the index only confirm what we have witnessed for the past years under former President Duterte,” Jan Robert R. Go, who teaches politics at the University of the Philippines, said in a Facebook Messenger chat.

He cited Mr. Duterte’s deadly drug war, which “involved excessive use of state-sanctioned force.”

The pandemic exacerbated the weak rule of law and justice system in the Philippines, with Mr. Duterte militarizing his response to the virus and “highly centralized control and decision-making of his office,” he added.

“No wonder our country’s ranking dipped and is now among nondemocratic regimes in the lower end,” Mr. Go said.

Arjan P. Aguirre, a political science professor at the Ateneo de Manila University, said the improvement of the Philippines in this year’s index was “merely numerical and nothing substantial.”

“The Duterte government has done many things that undermine rule of law,” Mr. Aguirre said in a Messenger chat, citing attacks on journalists, activists and critics.

Francisco A. Magno, who teaches development studies at De La Salle University, said the improvement in the country’s ranking was likely “due to efforts to slowly demilitarize the pandemic response.”

As Mr. Duterte neared the end of his term, Mr. Magno said he “tended to be more careful in the exercise of executive overreach as it became wary of potential lawsuits with the termination of its immunity protection.”

The index should be taken seriously because it is a reflection of Philippine institutions, “which can affect our economic performance and more importantly the distribution of welfare,” economist Leonardo A. Lanzona said in a Messenger chat.

Mr. Lanzona noted the Philippines ranked 51 in the 2015 Rule of Law Index under then President Benigno S.C. Aquino III, who launched a campaign against corruption, and fell to 70 in 2016 when Mr. Duterte took office.

“The second Marcos government should be serious in strengthening government institutions by making them more open or transparent, punishing erring public officials, and promoting human rights especially of those who dissent and oppose the government,” Mr. Aguirre said, adding that the state should also improve processes in the judicial system and develop “a more effective and independent approach in solving crime.”

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