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Private sector presses gov’t for green light to use P1.3B worth of expiring vaccines  

PHILIPPINE STAR/ MICHAEL VARCAS

PRIVATE companies are facing a wastage of P1.3 billion worth of vaccines against coronavirus that are expiring by the end of the month, according to a business leader.   

The private sector has appealed to the government to allow them to use the expiring vaccines as second COVID-19 booster shots for their workers.  

The possible losses worth more than P1.3 billion were only incurred by the private sector and “do not yet reflect the vaccines donated to the government,” said Jose Maria A. Concepcion III, a member of the President Ferdinand R. Marcos, Jr. Private Sector Advisory Council.  

As of writing, there were 623,680 AstraZeneca vaccines and 864,700 Moderna vaccines in private sector warehouses, Mr. Concepcion said.  

“Each AstraZeneca jab is estimated to cost at least US$5 each, while Moderna shots were bought for US$26.83 for each dose,” he said.   

The vaccines were purchased by the private sector through a tripartite agreement with manufacturers and the government as the country struggled to procure vaccines amid the pandemic.    

Under the agreement, half of the vaccines acquired by businesses were shared with the government.   

“We have to learn from this. I think what really contributed was the lack of clear rules on the vaccines: who is allowed to take the vaccines, and the ability of some bodies to move swiftly with science and the reality on the ground,” said Mr. Concepcion, who advised the previous administration on entrepreneurial concerns.   

Mr. Concepcion is among those appealing to the government to allow workers as young as 50 years to receive a second booster shot.    

“The lack of urgency with some bodies is still affecting the whole vaccine rollout. This shouldn’t be the case as we move forward,” he said.   

“The private sector has already proven that it is willing to get vaccinated. There is no need for mandates when it comes to the private sector.”  

Mr. Concepcion said the return of in-person classes and the vulnerability of the workforce should also be considered by the government in vaccine deployment. “Pandemic response should not be business-as-usual.” 

The private sector has been asking the government to lower the minimum age requirement for a second booster shot to 50 years instead of 60. 

Currently, only seniors and health workers may get a second top-up shot. 

Mr. Concepcion has been lobbying for reforms in the Health department’s Health Technology Assessment Council, which he said has failed to accelerate the government’s booster program.  

He earlier cited a slight delay in the administration of the first booster shot, which was first rolled out in the country in November.  

More than 71.4 million people had been fully vaccinated against the coronavirus as of July 19. More than 1.1 million people have received their second booster shot 

Experts earlier warned that waning immunity against the coronavirus among Filipinos and increased movement could trigger “small waves” of infections.  

BARMM 
Meanwhile, vaccination rate against coronavirus in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) in southern Philippines remained the lowest in the country at 39.73%, according to data from the Ministry of Health as of July 16.  

Fully vaccinated individuals, or those who have received two doses or one of a single-dose brand, were more than 1.38 million out of the 3.48 million eligible population.   

Those with booster shots were only 138,832 individuals.  

The Philippine government has set a target nationwide coverage of at least 70%.     

Health Undersecretary Maria Rosario Vergeire, currently the department’s officer-in-charge secretary, was in the region on Thursday to assure the BARMM government of continued support on health issues.   

“Let me express my gratitude to the Department of Health delegation. We are quite aware that in BARMM, the challenge is still very much high as far as vaccination is concerned,” Bangsamoro Chief Minister Ahod Ebrahim said in a statement. 

HIGHER TARGETS
Ms. Vergeire said the current administration is soon launching a campaign for higher coronavirus vaccination targets.   

She said under the “Pinaslakas” program, the national government aims to innoculate 90% of senior citizens nationwide with primary series and at least 50% of the eligible population.  

In May, the BARMM Ministry of Health set up 71 additional sites for a targeted vaccination campaign to ramp up coverage.   

Health Officer-in-Charge Minister Zulqarneyn M. Abas had said that the region’s low coverage rate is mainly due to hesitancy.  “Our top enemy in the low vaccination roll out in our region is the high vaccination hesitancy of the public,” he said.     

Health ministry Director General Amirel S. Usman also said then that while the region had been recording low coronavirus disease 2019 (COVID-19) cases and was at “relatively low risk,” a higher vaccination rate would help mitigate potential future outbreaks.    

Active COVID-19 cases in the BARMM as of July 20 remained low at 12 out of the 19,847 recorded since the start of the pandemic. Of the total, 19,142 recovered while 693 died.   

Basilan province had the highest number of active cases at 7, while Maguindanao province and Cotabato City had two each, and Lanao del Sur had one. — Kyle Aristophere T. Atienza and Marifi S. Jara 

BCDA pitches New Clark City for ecotourism investments 

THE RIVER Park in New Clark City has a path for walking and cycling along the Cutcut River. — THE BCDA GROUP 

THE BASES Conversion and Development Authority (BCDA) is positioning New Clark City as an ecotourism destination, with 9,450 hectares open for development to investors, the government-owned corporation said.    

“BCDA is always open to tourism investments in New Clark City. Given its strategic location, rich biodiversity and vast open spaces, it is the perfect place for eco-theme parks and ecotourism projects,” BCDA Senior Vice President for Conversion and Development Joshua M. Bingcang said during a recent investment promotion event.  

The Central Luzon Tourism Investment Summit and Business Exchange was attended by 36 investors and agencies from the Philippines, Singapore, China, Japan and South Korea, BCDA said in a statement on Thursday.   

New Clark City, located in Tarlac which is about 110 kilometers north of the capital Manila, is masterplanned as a green and smart urban center with 40% of the area for buildings and 60% allocated to open spaces, forests, and parks.  

The complex already has its River Park, a 4.5-hectare area that features a 1.4-kilometer walkway along the Cutcut River. There are also plans to develop the 44.8-hectare Central Park at the heart of the city, which will be one of the largest public parks in the country once completed, BCDA said.   

It is also home to an athletics center first used during the 2019 Southeast Asian Games. 

Mr. Bingcang also said they are continuously pursuing locators for mixed-use projects, retail, and food and beverage establishments.  

The New Clark City is linked to the Clark International Airport at the Clark Freeport Zone via an access road that is expected to be completed before the end of the year.  

BCDA said New Clark City will also become more accessible upon the completion of the North-South Commuter Railway. There are also plans to develop a public transportation system within the complex as locators and residents increase, it said.  

“We are already getting there. We’ve accomplished much of the infrastructure development,” Mr. Bingcang said. — MSJ 

Japan turns over water system, tech-voc center in South Cotabato 

JAPANESE EMBASSY IN THE PHILIPPINES
JAPANESE EMBASSY IN THE PHILIPPINES

THE JAPANESE government has turned over water supply projects in a remote village in South Cotabato province in southern Philippines, the Japanese Embassy said on Thursday. 

The P4-million project set up three communal faucet systems in Barangay Kablon in the town of Tupi, which had one of the lowest rates of access to safe potable water in the province. 

Japanese Consul-General Ishikawa Yoshihisa said during the handover ceremony that with the new water sources, residents will now be free from worries of contracting water-borne diseases and the physical burden of fetching water from long distances. 

Mr. Ishikawa also led the formal opening of a Japan-funded P4.3-million technical-vocational training facility that will be run by the municipal government of Tampakan, another town in South Cotabato.    

The new building expands the local government’s tech-voc training center that was built in 2011.      

Approved in 2018, both projects are part of Japan’s official development assistance programs to support peace and development in Mindanao under the Japan-Bangsamoro Initiatives for Reconstruction and Development. — Alyssa Nicole O. Tan 

Senate bill on zero hunger refiled 

PHILSTAR FILE PHOTO

A SENATOR has refiled a bill that mandates the government to ensure zero hunger in the Philippines within 10 years after the effectivity of the law amid threats of a global food crisis. 

Under Senate Bill 30, otherwise known as the Right to Adequate Food Act, the incidence of hunger in the country should be a quarter less than the level recorded at the time of its passage within 2.5 years. It should be reduced by another 25% after five years; another 25% after 7.5 years; until it reaches 0% after 10 years.  

Under the bill, hunger refers to a condition in which people do not get enough to eat that provides the necessary nutrients for a fully productive, active and healthy living due to the unavailability and inaccessibility of food.  

“The global food supply shortage that affects us today is beyond our control because it is dictated by global market forces,” Senator Ramon B. Revilla, Jr. said in a statement on Thursday. “But if we increase the local production of agricultural goods, we will become more self-reliant and maintain affordable food prices.”  

In June, former Agriculture Secretary William D. Dar warned about the impending food crisis brought about by the global food supply shortage, which is expected to become more evident by end-2022.   

Should the bill pass into law, the state must ensure that land devoted to food production is increased to 50% of all prime agricultural land in every region within 10 years.   

The proposed measure also requires the government to create a framework that will eliminate hunger in an organized strategic manner. A Commission on the Right to Adequate Food will also be established.    

Violators of the law may be imprisoned for a maximum of six years and fined with up to P500,000.  

In the 2020 State of Food Security and Nutrition in the World Report, the Philippines had the highest number of food-insecure people in the Southeast Asian region from 2017 to 2019 with 59 million Filipinos suffering from moderate to severe lack of consistent access to food. Moreover, 15.4 million were considered to be undernourished. — Alyssa Nicole O. Tan 

QC gov’t denies Bayan’s request to rally at Batasan Road during SONA 

BAYAN FACEBOOK PAGE
BAYAN FACEBOOK PAGE

THE QUEZON City local government denied on Thursday progressive group Bagong Alyansang Makabayan’s (Bayan) request to hold a protest along Batasan Road during President Ferdinand R. Marcos, Jr.’s first State of the Nation (SONA) Address on July 25. 

In a July 19 letter addressed to Bayan Secretary General Renato M. Reyes, the Quezon City Department of Public Order and Safety (DPOS) said Batasan Road, which is within the city’s jurisdiction, is not a designated freedom park for rallies and mass gatherings.  

It added that a rally would cause traffic congestion for motorists in the area.  

“The denial by the Quezon City DPOS of our application for a rally permit violates the law and our constitutional rights,” Bayan said in a statement. “The denial is arbitrary and follows the fascist imposition of the police. It is patently wrong.”  

The House of Representatives complex where the SONA will be held is located along Batasan Road. 

The Philippine National Police (PNP) earlier said it would deploy over 21,000 police officers for the SONA.  

PNP Spokesperson Jean S. Fajardo told a press briefing on Wednesday that violent protesters will be temporarily detained in a bus from the Bureau of Jail Management and Penology.  

The PNP had listed the Quezon Memorial Circle, the Commission on Human Rights compound, and the University of the Philippines campus as designated areas for protest activities. The entire Commonwealth Avenue, which is linked to Batasan Road, was also declared a no-rally zone.  

In a separate statement, farmers group Kilusang Magbubukid ng Pilipinas (KMP) said the denial of a permit to rally violates the group’s right to peaceful assembly and freedom of expression. 

“Our lives and our future are at stake here,” said Rafael V. Mariano, chairperson emeritus of KMP and former Agriculture chief. 

“What right does the DPOS or the Philippine National Police have to prevent any peaceful assembly?” he added. — John Victor D. Ordoñez 

Cayetano appeals to Marcos to veto vape bill 

PHILIPPINE STAR/EDD GUMBAN

A SENATOR has appealed to President Ferdinand R. Marcos, Jr. to veto a bill regulating vaping, citing that its passage will overturn stricter regulations and pose harm to the young market.   

“The Vape Bill does not regulate, but actually loosens crucial safeguards and makes these products more available to younger individuals,” Senator Pia S. Cayetano said in a letter to the President dated July 20.  

“Mr. President, I strongly urge you to veto the vape bill,” she said. 

The reconciled version of the bill passed the 18th Congress in January and was transmitted to the office of the President on June 24, according to a June 27 statement of Ms. Cayetano.  

Proponents of the bill have argued that vapes and heated tobacco products (HTPs) are effective cessation tools from cigarette smoking and note the need to regulate the industry, the senator said.  

However, she called these arguments “fatally flawed because rather than to regulate, the Vape bill actually removes the protective measures already found under Republic Act No. 11467 or the Sin Tax Reform Act of 2020.”  

She noted that under the proposed Vaporized Nicotine and Non-Nicotine Products Regulation Act, regulation of vapes and HTPs will be transferred to the Department of Trade and Industry (DTI) from the Food and Drug Administration (FDA).   

“It is incomprehensible how the DTI would perform the task of determining the safety of the products that will be on the market. By its very mandate, it is the FDA that has the power and the expertise to regulate this industry,” she said.   

Ms. Cayetano also pointed out that the proposed measure will lower age limits to 18 from 21 years.  

She cited studies which show that the brain continues to mature until the age of 25, and early exposure to nicotine, through vapes and HTPs, could impair brain development.  

More flavors are also allowed by the bill, Ms. Cayetano said, and this will likely appeal to the youth.  

“I thus reiterate my urgent call and echo the appeal of more than sixty medical associations and health advocates, former DoH (Department of Health) secretaries, and concerned government agencies… to veto the Vape Bill,” she said.  

“We need to listen to health experts,” she said. — Alyssa Nicole O. Tan 

The root of all evil

JCOMP-FREEPIK

Yes, money or the love of it is the root of all evil, but so is poverty in the Philippines. They may not be so conscious of it as to put it into words, but the results of a recent Pulse Asia survey suggest that the majority of Filipinos assume that poverty is their country’s number one problem — and the source of many others.

The survey found that what most Filipinos want the Marcos administration to immediately do are: 1.) control  inflation; 2.) raise workers’ wages; 3.) end poverty; 4.) make more jobs available; 5.) minimize government corruption; 6.) enforce the law equally, regardless of social, economic, or political status; 7.) reduce criminality; 8.) work for a peaceful society; 9.) extend financial aid to those who lost their jobs because of the pandemic; and, 10.) reduce if not eliminate the incidence of involuntary hunger.

Every one of those concerns is either directly or indirectly an economic issue. Number 3, poverty, is apparently the primary issue most citizens want addressed, of which all the others are manifestations or consequences. Inflation, inadequate wages, limited job opportunities, the loss of jobs, and hunger are either indicators or contributory factors to the descent into poverty in 2022 of some 46% of the population. (That number is expected to decline as the economy recovers, but poverty would still be the lot of millions of Filipinos unless long-term solutions to it are found.)

The criminality that worries most Filipinos and the armed conflicts that have persisted for decades are at least partly among the consequences of poverty and underdevelopment, while corruption and inequality before the law contribute to poverty as well as to the rebellions that have haunted this country for over a century. Poverty is both root and branch — the cause as well as effect — of the evils of Philippine society.

Controlling inflation, creating more jobs, and raising wages would enable more people to spend for their needs. They would end, or at least reduce involuntary hunger, and in the process also help revive the economy. But whether even these solutions can be realized in the shortest possible time is doubtful. The limited job opportunities in the Philippines, for example, are due to the equally limited capacity of the import-dependent economy to employ more people, while the inflation rate is subject to such vagaries as the price of petroleum products in the world market, the level of demand for them in other countries, the conflicting interests of rival nations, and the value of the peso vis-a-vis other currencies.

What are needed are long-term solutions. There is a National Anti-Poverty Commission (NAPC) which was created in 1998 by Republic Act 8425 in furtherance of the so-called Social Reform Agenda (SRA) of the government. Its mandate is to coordinate SRA efforts and to see to it that they are incorporated into national, regional, and local programs.

The law created a rather large and complex NAPC bureaucracy that is headed by the President of the Philippines. But despite the presumably best intentions of RA 8475, the persistence of poverty and the surge in the numbers of the poor suggest that it has not exactly been successful in putting a stop to, or mitigating, the poverty of millions of Filipinos.

In 2017, however, the NAPC Secretariat released its “Reforming Philippine Anti-Poverty Policy,” a paper that was the result of a year’s study by its staff and consultants which admits that what passes for the government’s anti-poverty policy has failed to achieve that end, and hence has to change.

It pointed out that despite economic growth, millions of Filipinos remain poor because the economy has not developed into an advanced industrial system. Some 21.9 million Filipinos, or 3.8 million families, are officially considered “income poor.” But as many as 50 to 60 million more Filipinos are potentially impoverished because of job insecurity and limited access to social services among other reasons. Illness in the family or the death of its breadwinner can also impoverish even middle-class families.

Instead of piecemeal, area-based, sectoral anti-poverty programs, the NAPC paper argues that poverty eradication must be the centerpiece of all social, economic and environmental government strategies.

Providing more jobs in the Philippines is imperative, both to enable families to keep body and soul together as well as to stop the exodus of Filipino workers to other countries that, by separating wives and husbands and children from parents has been devastating to the stability of many families. But it can happen only if structural reforms in agriculture and industry are implemented to so develop both as to make more jobs available, the NAPC paper continues. This would require the adoption of an authentic agrarian reform program that would encourage rural development, and of national industrialization as policy — the twin strategies that developed some of the Philippines’ closest neighbors, among them South Korea, Taiwan, Japan, and China. In addition, the adoption of a social policy that would ensure the delivery of such social services as education and medical care to all the citizenry is imperative, since eliminating, or at least alleviating poverty is not solely limited to providing jobs and a living wage.

The paper also points out that equally important in eradicating poverty is democratic governance, which can encourage the population to participate in the making of the decisions that are crucial to their lives.

The NAPC document was published five years ago, but few, if any, of its recommendations have been adopted. Economic growth per se, which presumes that its fruits will “trickle down” to the impoverished, is still the policy rather than making poverty eradication the central purpose of economic development and reform. Piecemeal and temporary poverty alleviation programs, which have been erratically and even whimsically implemented by the past regime, are continuing while more Filipinos are falling into deeper poverty and despair, as they and their children go hungry and are unable to afford adequate medical care when ill.

The consequences of the mass poverty that is among the inevitable product of underdevelopment are social instability, rebellions, and, perhaps worst of all, the hopelessness and despair that afflict untold millions in the slums of Philippine cities and the country’s impoverished rural areas. Implicit in the findings of the Pulse Asia survey is a sense among many that things have never been as bad nor as desperate — and together with it, the fear that they could be even worse.

There is no arguing against the fact that poverty alleviation has been the biggest challenge to every administration since 1946 when the country supposedly recovered its independence. But it is a challenge none of them ever met — or is perhaps a policy to which not one of them has really been committed despite their lip service to it. 

The Marcos administration could do worse than adopt the NAPC recommendations if it really intends to enable this country to recover from the past six years of bureaucratic bungling and corruption that have been so damaging to the lives of its people.

If it succeeds in at least reducing poverty, it could secure an honored and honorable place in Philippine history that no one would have any reason to question. Eradicating the curse of poverty would also be one way of transforming from rhetoric to reality its promise to “make this nation great again.” But does it have the capacity, the will, and — perhaps most important of all — the imagination to do so?

 

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

www.luisteodoro.com

The long road to fiscal consolidation

VECTORJUICE-FREEPIK

If there’s a credit rating analysis that best sums up the fiscal challenge for the Marcos Jr. administration, it has to be the February 2022 Fitch Ratings’ explanation of the negative outlook it assigned to the Philippines while affirming its triple B investment grade.

“The negative outlook reflects uncertainty about medium-term growth prospects as well as possible challenges in unwinding policy response to the health crisis and bringing government debt on a firm downward path.”

The Philippine Government as represented by Department of Finance (DoF) Secretary Ben Diokno is quite bullish about the recovery of business activities with the lifting of pandemic restrictions and normalization of people’s mobility. During the BSP-UP School of Economics Distinguished Lectures Series on July 18, the chief economic manager expressed his confidence that the economy could weather the implications of current geopolitical events and post-pandemic changes in the international financial system.

Three days earlier, on July 15, he assured the Group of 20 countries plus the European Union Finance Ministers and Central Bank Governors meeting that “we have a comprehensive set of interventions to effectively balance the need to sustain the growth momentum while containing inflationary pressures and their cascading effects on the economy.”

A day before that, on July 14, Secretary Diokno defended the aggressive monetary tightening by the Bangko Sentral ng Pilipinas (BSP) on the ground that the local economy remains robust enough “to absorb” it.

Trust for more traction was placed in the recent initiatives such as the Corporate Recovery and Tax Incentives for Enterprises Act, the Financial Institutions Strategic Transfer Act, Rice Tariffication Act and other initiatives.

RESILIENT GROWTH AND ECONOMIC SCARRING
The Philippine economy remains resilient due largely to more than 30 years of policy and structural reforms that have allowed the country to reap gains in both economic efficiency and total factor productivity. But it is hysteresis, or economic scarring of the pandemic, that could be the biggest hurdle to both economic growth and fiscal consolidation.

As AMRO’s (ASEAN + 3 Macroeconomic Research Office) Annual Consultation Report, released July 20, stressed, the prolonged closure of schools and the sub-par quality of online classes dependent on weak internet connection would have serious implications on the quality of the labor force in the years ahead. Upgrading and upskilling are imperative to attain an effective switch to digital, technology-driven economy. Labor market mismatches could be a costly drag to the new normal forced by the pandemic.

The closure of many micro, small and medium enterprises would also require substantial but focused support. It is the driving force behind the unprecedented rise in both unemployment and underemployment in the last two years. As a result, poverty has worsened.

This is the major reason why the new medium-term fiscal program 2022-2028 should be deliberate in calling for priority expenditure on health, disaster risk management, social security, digital economy, and growth-inducing shovel-ready infrastructure projects. Prioritization should thus be the buzzword particularly today because this government’s fiscal space might continue to shrink.

PUBLIC REVENUES
But we find the medium-term growth in revenues to be quite modest, unambitious in fact.

It is programmed to grow from an estimated 15.2% of GDP in 2022 to 17.6% of GDP in 2028. The programmed average ratio for 2022-2024 of 15.4% actually comes out even lower than the average ratio of 15.7% during the two-year pandemic when the economy severely contracted. In fact, the actual first quarter 2022 ratio had already reached nearly 16%.

This must be based on Secretary Diokno’s stand that tax administration, rather than new taxes, is the first priority to raise government revenue which would be reflected in the new fiscal consolidation plan.

Experience tells us that the path of tax administration, though paved with good intention, could lead to nowhere. Improving real property valuation and simplifying financial taxation will all depend on good implementation. It’s good the DoF has indicated its support for taxing digital services and transactions, but perhaps there should be more. As DoF chief economist Gil Beltran pointed out recently, there’s room for raising excise taxes on sin products like tobacco, vapes, and alcoholic drinks.

PUBLIC SPENDING
On the spending side, we find some disconnect with the medium-term growth targets. For 2022, the Development Budget Coordination Committee (DBCC) is envisioning a 6.5-7.5% and for next year through 2028, 6.5-8%. But ironically, public spending is programmed to decline from 22.9% in 2022 to only 20.6% by 2028.

Trimming the deficit from 7.6% in 2022 to only 3% by 2028 can only be done by increasing the revenues and real GDP. But the government, in adhering to an ambitious growth target, should also keep public spending very much engaged, rather than reduced as programmed, because private sector spending is yet to be self-sustaining. In short, as long as revenues are raised at a higher margin than the expansion of expenditure, we can have a situation of robust growth and sustainable public finance.

Otherwise, as AMRO warned, “it would take longer time to mitigate scarring effects” that have become more visible, and growth prospects might therefore be compromised.

FISCAL SPACE
Some fiscal space could be realized from a possible budget reassessment by individual agencies and realignment across departments and offices.

We find the Department of Budget and Management’s (DBM) previous issuance to revisit 2023 budget proposals relevant.

National Budget Memorandum No. 144 calls for both existing and new programs to be reassessed to ensure they are responsive to strategic direction for the year, implementation-ready, consistent with each agency’s absorptive capacity and aligned with the plans and priorities of the Marcos administration. These are a mouthful, and require serious thought and compliance.

DBM should truly commit to ensure the national budget allocation is prudent and judicial. The Commission on Audit (CoA) has time and again qualified its findings on many public agencies with respect to their use of public money. It’s not enough that the government takes pride in its ability to increase the release of notices of cash allocation (NCAs), the utilization of such funds should be intensified especially in the first half of the year when the weather is conducive to undertaking public works projects.

For instance, it was reported by CoA that because of implementation issues surrounding 14 foreign-assisted projects of the Department of Transportation worth P1.61 trillion in 2021, the government was forced to pay P128.42 million in additional fees.

CoA also found the Department of Social Welfare and Development failed to distribute P1.9 billion worth of Social Amelioration Program funds during the pandemic. In addition, it was only recently that the Department realized that some 1.3 families should have been dropped from the cash program because they have transitioned from extreme poverty. Some 600,000 more are expected to be delisted.

Some disbursements worth P33.446 million, CoA found, remains unliquidated by the Office of the President for the National Task Force to End Local Communist Armed Conflict. Whether some cash distribution was done for each local government unit remains to be seen.

On a bigger scale, some infra experts are of the view that many big Build, Build, Build projects could hardly be justified in terms of their economic value. Interest rates charged by bilateral sources have been found to be above market. Giving these flagship projects a second look could save the Republic billions of pesos that would otherwise have to be raised from additional taxes or borrowings, something that could bloat the debt to GDP ratio again.

Therefore, DBM’s directive for government agencies to rationalize their individual budget proposal should result in lower overall amounts. If needed, some realignments between and among agencies should also be done. In the congressional hearings, we should see the CoA representatives do due diligence to each agency’s goals and spending capacity. Special sessions should also be conducted to ascertain big infra projects’ economic values against their total costs and source of funding. Media coverage should be encouraged.

STATE OF THE NATION ADDRESS
We expect to hear President Bongbong Marcos explain the details of his government’s fiscal program to achieve speedy economic recovery, mitigation of the pandemic, and a return to fiscal sustainability on Monday during the State of the Nation Address. If market confidence is boosted and investments start streaming in, growth is likely to be sustained.

Going back to Fitch’s assessment, one can see the weight it assigns to government effectiveness, one that is inclusive of good and smart governance, rule of law and control of corruption. If we fail to reduce government debt to GDP ratio, it could be rating-negative while broadening the revenue base is rating-positive. Putting public finance on an even keel ensures a good trajectory of economic growth and promotes poverty reduction.

While we are way above Sri Lanka’s woes, this is one strategy of avoiding a descent to its level.

 

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.

Saudi Arabia reveals oil output is near its ceiling

TASOS MANSOUR-UNSPLASH

DURING US President Joseph Biden’s trip to Saudi Arabia, the world was so focused on how Crown Prince Mohammed bin Salman would respond to his plea to pump more oil immediately that it missed a bombshell: the level at which Saudi oil production will peak.

It’s a lot lower than many anticipated. It’s lower than the Saudis have ever intimated. And with the world still hungry for fossil fuels, it spells long-term trouble for the global economy.

For years, Saudi oil ministers and royals have sidestepped one of the most important questions the energy market faces: What is the long-term upper limit of the kingdom’s oilfields? The guesstimate was that they could always pump more, and for longer; if the Saudis knew the answer, they kept it secret. And then, almost casually on Saturday, Prince Mohammed broke the news, revealing that the ultimate maximum capacity is 13 million barrels a day.

Prince Mohammed framed his answer emphasizing that the world — and not just countries like Saudi Arabia — needs to invest in fossil-fuels production over the next two decades to meet growing global demand and avoid energy shortages. “The kingdom will do its part in this regard, as it announced an increase in its production capacity to 13 million barrels per day, after which the kingdom will not have any additional capacity to increase production,” he said in a wide-ranging speech.

It bears repeating: Saudi Arabia, the holder of the world’s largest oil reserves, is telling the world that in the not-so-distant future it “will not have any additional capacity to increase production.” Let that sink in.

The first part of his announcement was well known. In 2020, Riyadh instructed its state-owned oil giant Saudi Aramco to embark on a multiyear, multibillion-dollar program to boost its maximum production capacity to 13 million barrels by 2027, up from 12 million. The project is ongoing, with the first small additions coming online in 2024 followed by larger ones in the following three years.

But the second part was completely new, setting a hard ceiling at a much lower level than the Saudis have themselves discussed in the past. Back in 2004 and 2005, during Riyadh’s last big expansion, the kingdom made plans to expand its pumping capacity to 15 million if needed. And there was no suggestion that even that elevated level was an upper limit.

For example, Aramco executives told the CSIS think tank in Washington in 2004 that the company could sustain output levels of 10, 12, and 15 million barrels a day for 50 years if needed. At the time, Riyadh was fighting the views of the late Matt Simmons, author of the much-discussed book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. The book argued that peak Saudi oil production was just around the corner.

One reason why Saudi Arabia is now setting a lower production ceiling may be related to climate change. Unsure about future oil demand growth, Riyadh may calculate that it’s foolish to spend billions of dollars in new capacity that may not be needed.

In his speech, Prince Mohammed stressed the “importance of assuring investors” that policies do “not pose a threat to their investments,” with the aim of avoiding “their reluctance to invest.” I don’t think Prince Mohammed was talking about Wall Street money and hedge funds when he said “investors.” It’s a term that also covers Saudi Arabia’s interests.

Oil demand forecasting is as much art as science — and the kingdom is conservative by nature. A decade ago, then Saudi energy minister Ali Al-Naimi said Saudi Arabia would be “lucky” to be pumping more than 9 million by the early 2020s. “Realistically, based on all projections that I have seen, including ours, there is no call on us to go past 11 million by 2030 or 2040.” The reality has turned far more positive than he anticipated: next month, Aramco will lift daily production to just above 11 million barrels.

If demand proves stronger in the coming years than the Saudis currently anticipate, the kingdom may simply revise its investment plans, and announce it’s able to boost output further. But Prince Mohammed sounded rather definitive in setting that 13 million upper boundary. If money isn’t the constraint, then it must be geology.

For years, Saudi Arabia has brought new oil fields online to offset the natural decline of its aging reservoirs, and allowed Ghawar, the world’s biggest oil field, to run at lower rates. As it seeks to boost production capacity and not just offset natural declines, Aramco is increasingly turning to more expensive offshore reservoirs. Perhaps Riyadh is less confident in its ability to add new oilfields. Ghawar itself is pumping far less than the market assumed. For years, the conventional wisdom was that the field was able to produce about 5 million barrels, but in 2019 Aramco disclosed that Ghawar’s maximum capacity was 3.8 million.

If the obstacle to boosting production is geology, rather than pessimism about future oil demand, the world faces a rocky period if consumption turns to be stronger than currently expected. For now, Saudi peak production is a relatively distant matter, at least five years away. More urgent is whether Riyadh would be able to sustain its current output of 11 million — something it has achieved only twice in its history, and then only briefly — let alone increase it further. But that ceiling will matter towards the end of the decade, and perhaps even earlier.

Despite widespread talk about peak oil demand, the truth is that, for now at least, consumption keeps growing. The world relies heavily on three nations for crude: the US, Saudi Arabia, and Russia. Together, they account for nearly 45% of the global total oil supply. With US investors unwilling to finance a return to the days of “drill, baby, drill” at home, American output growth is now slower than it was in the 2010s. Russia faces an even darker outlook as the impact of Western sanctions not only curb current supply, but also hinder its ability to expand in the future.

In an era of climate change, Saudi oil production will be, ironically, even more important. And Riyadh has now, publicly, set a hard limit on how much it can pump. This time, oil demand will have to peak — because there won’t be additional supply. Ultimately, there are only two routes to that outcome: Voluntarily, by shifting to low-carbon sources of energy such as nuclear power or wind; or by compulsion, via much higher oil prices, faster inflation and slower economic growth. If we don’t take the first path, we’ll be forced to follow the second.

BLOOMBERG OPINION

When historians gossip about history

MASTER1305P-FREEPIK

Turns out, even the Father of History isn’t above a bit of gossip himself.

Writing of Herodotus, culture writer Charlotte Higgins (“The rest is history,” January 2009) lists down some of the more fantastical accounts in The Histories: “… we have a bearded priestess; a description of the embalming techniques of the Egyptians; a great number of mouthy women (including Atossa, the wife of Darius, whose pillow talk is supposed to have convinced the Persian king to turn his attention towards a Greek conquest); and the curious giant ants of India, bigger than foxes but smaller than dogs, who tunnel deep underground to harvest gold. That’s not to mention the steppe-dwelling Scythians, who wear coats made from human scalps; the musician Arion, whose life is saved by a dolphin; and the sheep of Arabia, whose tails are so long they drag them on little carts.”

FALSIFY FALSIFY
Indeed. And the foregoing makes a greater point about “history” and historians: Anything a historian says is fundamentally hearsay because practically most of the time he was never there when the events he is reporting on occurred. Most of the time, he was never in the room when a “historic” decision was made or action taken.

Instead, historians report on evidence they gathered: testimonies, documents, photographs, etc. But witnesses can lie or spout hearsay, documents may contain lies or be faked, photographs can be taken out of context or be doctored. That is why this evidence, those things historians say they “hold true,” need to be constantly questioned (in court trial, the process is called “direct or cross examine”).

This effectively makes any historical “truth” — including particularly scientific facts — as so only for the present moment. In Popperian terms, they can only be disproved or “falsified” but never be proven as “true.”

ALWAYS ROOM FOR DOUBT
Put another way, except for moral truths and mathematical laws which can be held as true for eternity, nothing else can be absolutely proven as true.

Because if historical “truths,” including scientific facts, are based on empirical observations, then there’s no way one can know everything. Everything historical or scientific always has that possibility of later being proven untrue. Admittedly, some facts like gravity, differences between men and women, earth is round, etc., experience (i.e., constant and continuous testing and experimentation), common sense, and logic will tell you it’s 99.9% true but that’s as far as it could go. There’s always that 0.1%.

“Historical ‘truth’ is subject to so many sieves: 1. The motives and the bias of the historian, 2. The evidence available, 3. The evidence selected as relevant and the material excluded as irrelevant, 4. One’s own historical standpoint, 5. One’s theory of history, 6. The soundness (or unsoundness) of inferences one draws from the present (relics, documents, artifacts, monuments, etc.) about the past. And others. Unlike perception, what is lacking is immediacy. This is the particular contribution of historians: to offer us constructs that should never be foisted as absolute truths but as tentative interpretations of data.” (Fr. Ranhilio Aquino, social media comment, July 19, 2022)

“Historians recognize that individual facts and stories only give us part of the picture. Drawing on their existing knowledge of a time period and on previous scholarship about it, they continually reevaluate the facts and weigh them in relation to other kinds of information, questions and sources. This is inescapably a task of interpreting rather than simply collecting data. Just as with any important shared body of knowledge, then, history is always undergoing reexamination and reconsideration.” (“Why do historians’ accounts of the past keep changing?,” National Council on Public History, https://ncph.org)

REVISIONISM
This does not mean that a past event has changed but rather the telling or appreciation of that past event is logically adjusted as more facts come in: “People who are not professional historians sometimes assume that historical research is a once-and-for-all process that will eventually produce a single, final version of what happened in the past. We often hear charges of ‘revisionism’ when a familiar history seems to be challenged or changed. But revisiting and often revising earlier interpretations is actually at the very core of what historians do. And that’s because the present is continually changing.” 

Hence why “revisionism” should not be considered a dirty word. Revisionism, done honestly and with humility, going beyond narrow ideological and partisan mindsets, laying openly old and newly discovered facts set in proper contexts, would be really good for our people in knowing the actual truth about past events.

WHY FREE SPEECH IS IMPORTANT
That is why it is inane for anyone to claim exemption from being questioned, particularly when that person vociferously imposes on others so-called “truths,” because the only way we can arrive at a “truth” is to continually question and test it, over and over again. That is precisely why we have the right to free expression. That right exists not for people to indulge in narcissistic displays of “self-expression” but rather because free speech is the mechanism with which we continuously test “facts” rather than have what we think or believe be dictated to us by “experts.”

To have the questions come from the “experts” alone is self-defeating. Every “expert” inherently comes with a bias, professional or personal. They can consciously or unconsciously be selective of the evidence they accept or reject (as we’ve clearly seen in the recent election campaign). Pride of authorship can also come in. Experts are also prone to human error. There’s this legal dictum that goes: “constitutional law is too important to be left to lawyers alone.” Well apparently, the same goes for history, it’s too important to be left to historians alone.

Absent that right of the people to unrelentingly question history and the “experts,” then so-called “history” is indeed just “tsismis” (gossip).

WHAT WRONG SIDE OF HISTORY?
Finally, there’s that vacuously vapid threat so beloved by those that love dictating what others think: disagree with us and you’ll be on the “wrong side of history.”

The question is: who decides what is right or wrong? The historians? Many individuals have been labeled numerous times as being on the “wrong side of history,” including those with public positions in favor of international trade, in defense of Philippine territorial rights, or against lockdowns, mandatory vaccination, abortion, contraception, divorce, same sex “marriage,” transgenderism, and LGBT “rights.” So far, those positions have been proven right every single time. So far. Thus, as to whether anyone is on the wrong or right side of history, that is better left to being decided by one’s conscience and ultimately God rather than by some historian.

 

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

Heatwave fee for Asia’s gig workers does little to cool climate stress

HO CHI MINH CITY/BANGKOK — As a heatwave engulfed northern and central Vietnam earlier this month, customers reaching for their phones to order food or a ride on the Grab app learned they would have to pay a surcharge. 

The extra fee, applied when the local temperature hits 35 degrees Celsius, came months after the Southeast Asian platform company introduced a rainy-weather fee in Vietnam. 

“Working under such bad weather conditions can be tough on our driver- and delivery-partners. We want to ensure they are fairly compensated for it,” a Grab spokesperson told the Thomson Reuters Foundation. 

In Hanoi and Ho Chi Minh City, the surcharge is 5,000 Vietnamese dong ($0.21) for Grab’s motorcycle taxi, and food and grocery deliveries, and 3,000 dong for its quick delivery service. 

Nguyen Tuan, a Grab driver in Ho Chi Minh City, said the additional payment gave him and his colleagues an incentive, as they have to work regardless of weather conditions. 

“If I don’t work, where do I get money to eat? I make a living day by day,” said Mr. Tuan, who puts in several hours a day as a food-delivery and motorcycle-taxi driver. 

Platform companies offering delivery and ride-hailing services have come under increasing scrutiny for their planet-heating emissions linked to traffic congestion and packaging. 

But there has been little discussion of how riders and drivers are dealing with extreme weather, as they often work long hours, waiting at street corners and outside restaurants for orders, and have limited access to medical care. 

Only now is the issue starting to grab the public’s attention as climate change brings more frequent and intense heatwaves and floods around the world, raising questions about the health impacts for the must vulnerable in the labor force. 

‘ABSOLUTELY INHUMANE’
India, which is estimated to have more than 7.5 million gig workers, was hit by several heatwaves in April and May, with temperatures of 45°C-50°C recorded in parts of the country. 

In May, a series of tweets from Mumbai resident Parizad Baria-Unwalla went viral as she described finding out that her food order was delayed because the delivery worker was walking to her home from the restaurant. 

“It is a summer afternoon in Mumbai and the restaurant was 4.5 km away. This is absolutely inhumane,” she wrote, as she appealed to the Swiggy platform to get him a cab or an auto rickshaw, and offered to pay for the transport. 

Dozens weighed in, with one user saying they had stopped ordering from Swiggy after a delivery worker cycled at least 5 km to their home at noon. 

Swiggy did not respond to a request for comment. 

“Gig workers in India have no protections because they are not recognized as workers, and hence don’t fall under the occupational health and safety rules,” said Rikta Krishnaswamy, a representative of the All India Gig Workers’ Union. 

While several platform firms hike prices during rains, that is more due to heavy demand, she said. Few firms make similar concessions in hot weather. 

“The workers are not even allowed to go into restaurants to pick up orders or get a drink of water, or use the washroom to freshen up. Meanwhile, companies are pushing more of their workers to cycle as part of their ESG drive,” she added. 

Zomato, another Indian platform company, delivered nearly a fifth of its food orders by bicycle in the financial year to March 2022, according to its Environmental, Social and Governance (ESG) report. 

Zomato pays riders an extra fee for deliveries in the rain, and reduces the distance they have to travel, a spokesperson said. 

During the recent heatwaves in India, the company set up refreshment centers in several cities for riders to rest between deliveries and get free cold drinks, the spokesperson added. 

RISING RISK
Demand for gig work has surged in recent years with the growth in e-commerce and the so-called “platformization” of work, with advocates saying it offers both sides greater freedom and flexibility. The pandemic further boosted demand. 

But critics say it exploits workers who have few other choices, and that it undercuts hard-won labor rights, with gig workers in poorer nations largely treated as casual labor. 

Heat stress occurs at temperatures above 35°C in high humidity, according to the International Labour Organization. Heat stroke can occur if body temperature rises above 40°C. 

In the UAE, where summer temperatures can top 45°C, delivery workers are exempt from taking a mandatory break from 12:30 p.m. to 3 p.m., between June 15 and September 15, introduced to protect laborers from the “risks of exposure to high temperatures.” 

Where laborers have to work during these hours, employers must provide cold drinking water, first-aid kits, cooling facilities and shaded rest areas. 

Similarly in India, while several states have adopted heat action plans that recommend minimal outdoor activity during the hottest hours of the day, this is not an option for gig workers. 

Exposure to extreme heat can have adverse health impacts, and also carries an increased risk of injury or lapses in concentration, said Jaya Dhindaw, program director for urban development, planning and resilience at WRI India, a think-tank. 

“Platform workers will be especially susceptible to this,” she said. “However, strategies like a hot-weather surcharge should not be used as a way to exploit workers and drive them to deliver under dangerous or unsafe circumstances.” 

Meanwhile in Vietnam, on a public Facebook group of Grab drivers in Ho Chi Minh City with over 51,000 members, there were dozens of comments on the heatwave surcharge. 

In one post that has garnered over 300 likes and more than 100 comments, a member said that of the additional fee of 5,000 Vietnamese dong, drivers only get 3,600 dong, while Grab gets the rest for “sitting around doing nothing.” 

Tan Giang, a Grab user in southern Vietnam, said he would be happy to pay the surcharge if it benefited drivers 100%. 

“As a customer I support that because it is their sweat and tears,” he said. ($1 = 23,401.707 Vietnamese dong) — Sen Nguyen and Rina Chandran/Thomson Reuters Foundation

Sri Lanka swears in new president amid worst economic crisis in decades

COLOMBO — Veteran politician Ranil Wickremesinghe was sworn in as Sri Lanka’s new president on Thursday, a day after winning a vote in parliament and urging the island nation to come together to find a way out of its worst economic crisis in decades.

The six-time prime minister succeeded Gotabaya Rajapaksa who fled Sri Lanka and resigned from his post last week after mass protests over his handling of the economy. The swearing in ceremony was conducted in parliament, and presided over by the country’s chief justice.

The country of 22 million people has been crippled by a severe financial crisis, with a lack of foreign currency leading to shortages of essentials including fuel, food and medicines.

Sri Lanka received fresh diesel supplies over the weekend, and the main state-run distributor, Ceylon Petroleum Corporation, will restart sales under a new rationing system from Thursday onwards, the power and energy ministry said.

The protest movement that pushed out Mr. Rajapaksa — the first sitting Sri Lankan president to quit office — remained largely muted, despite Mr. Wickremesinghe’s unpopularity among some sections of the population.

Only a handful of people were present outside the presidential secretariat on Thursday, a colonial-era building that was stormed by a sea of protesters earlier this month along with the president and prime minister’s official residences.

But some have vowed to fight on against Wickremesinghe.

“We won’t give up because what the country needs is a total system change,” said Pratibha Fernando, a protester at the secretariat. “We want to get rid of these corrupt politicians, so that’s what we are doing.”

Hours after winning the parliamentary vote on Wednesday, Mr. Wickremesinghe appeared to distance himself from the powerful Rajapaksa family that has dominated politics in Sri Lanka for decades.

“I am not a friend of the Rajapaksas. I am a friend of the people,” he told reporters after praying at a Buddhist temple in the commercial capital Colombo.

Mr. Wickremesinghe, who earlier served as prime minister and finance minister under Rajapaksa, has been involved in negotiations with the International Monetary Fund (IMF) for a bailout package worth up to $3 billion.

Sri Lanka is also looking for assistance from neighboring India, China and other international partners. — Reuters

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