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Opportunities for tech companies to seize in 2022

(Second of two parts)

As the digitalization of the world economy further accelerates, the technology sector will likely continue to grow, especially now that vaccines and proactive health and safety measures are helping manage the pandemic. In line with this, EY ranks the top 10 opportunities from its annual report that technology companies should seize for growth while navigating volatility and risks in 2022.

In the first part of this article, we discussed the first five opportunities: attracting and retaining more motivated people in a hybrid workplace, strengthening growth profile with M&A, securing business continuity by de-risking supply chains, embedding security in new activity designs, and leading in ESG to strengthen stakeholder relations.

In the second part of this article, we continue by discussing the remaining five: transforming the business for consumption-based sales, realigning tax organizations with digital business models, streamlining operations and increasing agility, cultivating customer trust to drive digital engagement and anticipating the transition to 5G technology.

TRANSFORM BUSINESS FOR CONSUMPTION-BASED SALES
During the pandemic, consumption-based business models offered a higher valuation from investors and better protection against economic volatility compared to traditional one-off payments. With more and more customers preferring the flexibility of cloud-based services and software, subscription payments are expected to rapidly replace traditional license payments over the next five years.

In order to enable this shift, companies need to change their pricing tools, transform their sales organizations, adopt new incentive schemes, realign their major business processes and track different performance indicators. Though the transition will be challenging, companies will be rewarded with more time to build customer relations, recurring revenues, and the opportunity to generate higher revenues from each user through upselling and cross-selling.

REALIGN TAX ORGANIZATIONS WITH DIGITAL BUSINESS MODELS
Taxation and legislation changes are targeting the technology sector worldwide, with governments looking to shift the taxation base to capture more value from the growing economic contributions made by digital services. Sudden changes are caused by trade disputes and governments who are looking to protect or strengthen their key industries, and this often includes technology segments.

Tech companies need a robust approach to global trade and taxation with regard to their large international footprints as well as their large base of assets, both material and immaterial. This approach has to be built on early planning, real-time insights and an agile operating model.

STREAMLINE OPERATIONS AND INCREASE AGILITY
With the current unprecedented economic uncertainty and volatility, customer preferences are shifting overnight and causing large swings in demand. This is especially true in the technology sector. The risk profiles in the sector have also changed due to supply chains getting stretched and geopolitical factors influencing trade. This further increased the need for organizations to transform.

To remain competitive, tech companies need to match operational agility with the future levels of volatility in their business. This can be achieved by leveraging data analytics, cloud capabilities and automation tools, streamlining business processes, and identifying ways to simplify the organization.

CULTIVATE CUSTOMER TRUST TO DRIVE DIGITAL ENGAGEMENT
Digital companies rely on trust to keep driving customers to visit, interact and share the necessary data to create a business and drive growth. Because alternatives are a click or two away, a lack of trust can instantly send customers to competitors.

EY research has found that the main drivers of trust and distrust include transparency, ethics, security, regulatory compliance and content. To gain the trust of customers, companies must prioritize protecting customer data and maintain clear policies on dealing with issues that include fake content, discrimination and online abuse. A digital trust strategy that incorporates all the elements of trust has to be established.

PREPARE FOR 5G ADOPTION
The tech industry is gearing up for large-scale implementation with the rollout of 5G driving revenue across the entire technology stack. According to Reimagining industry futures, an EY survey of attitudes across multiple enterprises worldwide, a little over half of enterprises at 52% are more interested in 5G now compared to before the pandemic. This shows that 5G is not just a new connectivity standard, it is also expected to change how objects and devices interact as well as how machine learning and data analytics can be used to improve logistics, identify supply chain bottlenecks and reshape customer interaction.

As many as three out of four enterprises in the survey believe that 5G will be integrated into their business processes over the next five years, but for this to happen, tech companies need to prepare adoption roadmaps and use cases to stay ahead.

EMBRACING OPPORTUNITIES FROM VOLATILITY AND RISK
Although the world is still experiencing uncertainty from geopolitical issues and the pandemic, these risks reshape the opportunities that can help tech companies develop new markets and increase their competitiveness. Regrouping organizations around security and trust to increase stakeholder commitment as well as organizational transformation and the adoption of new business models can help drive market relevance and agility.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Rossana A. Fajardo is the EY ASEAN business consulting leader and the consulting service line leader of SGV & Co.

Why a woman is likely a better President than a man

FREEPIK

Let’s talk about how women can transform our country. After all, the month of March is National Women’s Month.

The good news is that the Global Gender Gap Report 2021 published by the World Economic Forum ranked the Philippines 17th among 156 countries. In East Asia and the Pacific, the Philippines came second, behind New Zealand (ranked fourth over-all).

The world has closed the gender gaps in relation to health and survival and educational attainment. For example, out of the maximum grade of 1.00 (which suggests gender parity), the Philippines scored 0.979 for health and survival and 0.999 for educational attainment.

For most countries, much still has to be done in narrowing the gap with respect to economic participation and political empowerment. For economic participation, the whole world has to close 48% of the gap. For political participation, the disparity is worse, a gap of 78%.

Relative to the rest of the world, however, the Philippines is not doing badly with regard to economic participation and political empowerment.

The 2021 report gave the Philippines a respectable score of 0.795 on economic participation and opportunity. Here, the Philippines ranked 18th among 156 countries. That said, the challenge for the Philippines is to increase labor force participation among women and further narrow the wage and income gaps between sexes.

On political empowerment, the Philippines had a low score of 0.362. But that was still above the international average. The Philippines was ranked 33rd among 156 countries in terms of political empowerment. Less than a third of Filipino lawmakers are women. And only two women are formally appointed members of the President’s Cabinet.

We can observe that women in political leadership remain unappreciated. Strong, competent women are disparaged.

Take the case of presidential candidate Leni Robredo. We hear stories of people, especially males, who opt not to vote for her because babae siya (she’s a woman). The prejudice against Leni for being a woman candidate is also fueled by propaganda to smear her.

But Filipinos are no strangers to having women presidents. So being babae is not an impregnable barrier to winning the presidency.

To be sure, a stark difference exists between Cory Aquino and Gloria Macapagal Arroyo. Cory is revered for leading the fight against the dictatorship and restoring democracy. Gloria is disliked for the electoral fraud (“Hello Garci”) and the corruption scandals (NBN-ZTE overpricing and fertilizer scam, among others) that happened during her term.

The corruption of the Arroyo administration gives credence to the argument that not only men but also women can abuse power, particularly when weak institutions do not constrain them. But as we shall see, Gloria is not the archetype of the woman politician. As various studies have shown, greater women representation in political leadership results in less corruption.

Uncannily, what’s common between the two is that their ascendancy to power was a consequence of the fall of corrupt regimes. It was the despotism and greed of the Marcoses that paved the way for the economic and political crisis. This led to people power and Cory’s victory. It was the jueteng pay-off that triggered Erap’s removal and Gloria’s accession to the presidency.

Corruption is a perennial issue. And corruption is going to be a major issue in the 2022 elections. Surveys confirm this. For example, a private survey done in December 2021 reveals that corruption is “the main source of anger.” The procurement scandal known as Pharmally, which affected government’s pandemic response, remains fresh in people’s minds. All the major presidential candidates but Marcos Jr. have a strong anti-corruption message.

Here’s the thing. In an article dated February 18, 2022, The Economist tackles “why women are less likely to be corrupt than men.” What the article says is nothing new. The same explanation and conclusion can be drawn from a slew of studies. Worth citing, too, is the 2020 report of the United Nations Office on Drugs and Crime (UNODC) titled “The Time is Now: Addressing the Gender Dimensions of Corruption.”

The Economist, citing Transparency International, states that corruption all over the world remains unabated and has even worsened in some countries. Still, the same old prescriptions are used to combat corruption.

It however presents an unorthodox insight: Get women to fight corruption. Studies from the World Bank and the academe provide the evidence.

A 2001 World Bank study that covered 100 countries concluded that in countries with a greater percentage of female legislators, the likelihood of officials demanding bribes was less.

Another study found out that between 1979 and 2014, Chinese women bureaucrats in senior positions were 81% less likely to have been detained for corruption than their male counterparts. Similarly, from 2000 to 2016, Italian women officials were 22% less likely than their male equivalents to undergo investigation for corruption.

Other studies offer explanations. One strand of thought is that even if women gained access to power, they would be risk-averse to committing corruption. Getting caught would mean facing more severe ostracism and punishment than what men would undergo.

Further, women politicians are not typically connected to the corruptive networks. They do not belong to the “old boys’ clubs” or the male-dominated patronage networks. Male politicians dominate the big traditional political parties and sideline the women politicians from having a bigger role.

Further, in Mexico, it has been observed that women who emerged as politicians first worked for nonprofits. Only later did they make a transition to electoral politics. Their formation anchored on voluntarism and altruism has made their values and priorities very different from the traditional, patriarchal politicians.

Women are very exposed to everyday corruption especially those relating to the provision or delivery of public goods on health, education, social welfare, and justice. In this regard, to quote the 2020 UNODC report, “women in leadership roles have been shown to be more motivated and invested in addressing aspects of corruption that are closer to their own reality.”

Come to think of it, Leni Robredo fits the archetype of the honest woman politician who will be able to effectively fight corruption.

Her becoming a politician and her joining the Liberal Party (LP), which, like it or not, is seen by the public as a traditional political party, was a historical accident. The sudden death of her husband Jesse shoved her into politics. She was not even part of the Liberal Party’s inner core when it was the ruling party. And now she is running for President as an independent.

Before becoming a legislator, Leni was involved in development work with nongovernmental organizations. As a lawyer, she joined the Public Attorney’s Office where she rendered legal assistance to the poor. She later became part of the alternative law group called SALIGAN, a nongovernmental organization that provides free legal services to the marginalized sectors. Her local civic engagement then also included women’s empowerment.

Leni’s record speaks for itself. No stain of corruption. The Commission on Audit has given her Office of the Vice-President the highest rating, an “unqualified opinion,” for three consecutive years (2018, 2019, and 2020).

So, there you are: A woman is likely better than a man to become a President. As Leni herself said: “The last man standing is a woman.”

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

The fallout from a faraway war

KERFIN7-FREEPIK

I am pleased to share with readers our March 10, 2022 post to GlobalSource Partners subscribers (https://www.globalsourcepartners.com/). Christine Tang and I are their Philippine Advisor.

The updates below are intended to give readers a better sense of how Russia’s invasion of Ukraine is affecting the local economy.

• Gas stations carried out this week their heftiest price increase so far this year, bringing gasoline prices about 20% above December 2021 levels. The upward adjustments will continue if world crude oil prices stay elevated or continue to rise. Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno told reporters that a worst-case scenario where oil prices are sustained at $120-140/barrel (bbl) would push up the annual average inflation to 4.4% to 4.7%, above the monetary authority’s inflation target. As of yesterday, Dubai crude oil, the BSP’s benchmark, was already above $122/bbl.

However, the worst-case scenario for inflation will not be limited to oil prices. We earlier wrote about other transmission channels, including food and feeds, other fuel inputs for electricity, a weaker currency and other second round impacts. Additionally, experts warn that high fertilizer prices that may cause farmers to reduce application could lead to lower crop production, including rice, which will add to price pressures.

• Clamors for transport fare adjustments and suspension of oil taxes are rising. Economic managers appear resolute in granting neither. Instead, Finance Secretary Carlos Dominguez has agreed to double the budget for targeted subsides to key sectors, i.e., public utility vehicles and agriculture, which is deemed a more equitable solution. The overall package is estimated to cost government P6.1 billion, a small sum compared with lawmakers’ proposal to suspend oil excises which over a six-month period would cost about P40 billion (0.2% of GDP).

Public finances, already strained by pandemic assistance and stimulus programs, are coming under increasing pressure, both on the revenue and expenditure sides. In addition to fuel subsidies, economic managers are also proposing to temporarily reduce tariffs and remove other trade barriers on imports of basic food and fuel items. Among the target commodities are rice, corn, pork, fish, chicken, sugar, wheat, and coal. These surgical measures, which are expected to be done through Executive Orders, will nonetheless translate into foregone revenues.

Further, the Treasury has been rejecting this month market bids for its primary auction of Treasury bills and bonds due to higher-than-expected bid rates. Although it could afford to do this after raising P458 billion of retail treasury bonds last month, Secretary Dominguez has acknowledged that the conflict in Ukraine will likely raise borrowing costs even more, apart from US monetary policy tightening.

• The peso has shed close to P1 against the US dollar this month, closing at P52.24/$1 yesterday, with the BSP intervening to temper losses. This is reflective of market expectations of a worsening current account as the terms of trade deteriorate with rising world commodity prices. Last quarter, the BSP forecasted a current account deficit of 2.3% of GDP this year. At the time, Dubai crude oil still averaged below $80/bbl. As we noted in our last Forecast report, although the country has ample foreign reserves, markets under risk-off conditions may choose to focus on the direction of change, and any demand response to the higher prices notwithstanding, a widening current account deficit will increase exchange rate volatility.

The best-case scenario for the Philippines is one where the crisis will not, in the words of the finance secretary, “last very long.” Although the President seems quite supportive of his economic managers at this time, the team is expected to be replaced by mid-year (not including BSP Governor Diokno who has a fixed term till June 2023.) and it is very difficult to predict what a new administration confronted with rising inflation will do to preserve its popularity.

 

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos Administrations. He is a trustee/director of the Foundation for Economic Freedom, Management Association of the Philippines, and FINEX Foundation.

romeo.lopez.bernardo@gmail.com

Ukraine: Faith and State

FREEPIK

“Russians and Ukrainians are one people — a single whole,” Russian President Vladimir Putin wrote in a passionate article on Kremlin.ru on July 12, 2021. It was a long dissertation on the common origins of Russians, Belarusians, and Ukrainians in medieval Kievan Rus’ and their history through the century, concluding that “true sovereignty of Ukraine is possible only in partnership with Russia.” He also argued that the Ukrainian leadership had “wasted and frittered away the achievements of many generations,” accusing them of imposing a nationalist, anti-Russian sentiment against the will of the Ukrainian people (Retrieved Jan. 21, 2022 from the original by Wikipedia).

What urged Putin to say all that? In April 2021, Ukrainian Foreign Minister Dmytro Kuleba said that provocations by Russia with the relocation of troops to the border with Ukraine and the aggravation of the situation in the east (the Ukrainian secessionists supported by Putin) were the most serious since the attack on Ukrainian sailors in the Kerch Strait in November 2018 (Retrieved May 31, 2021 from the original by Wikipedia). Putin alternately denied the unspoken threat to Ukraine by the massing of troops on their common borders, and his spoken affirmation of the oneness of Russia and Ukraine.

But History will not be silenced, as it repeats itself in the re-enactment of the past that already forbode the continuing conflicts between Russians and Ukrainians. Perhaps Putin is wrong. Russians and Ukrainians are not one people. Maybe he knows that, too.

The dissolution of the Union of Soviet Socialist Republics (USSR) three decades ago divided the people of the union. Some say it was inadvertently started by then-President Mikhail Gorbachev when he introduced glasnost (transparency of government) and perestroika (participative public-private cooperation) at that time when the Cold War was thawing between the communist governments and the democratic “West” led by America, and the peoples of the Soviet states became aware of how other nations lived and thrived. It lit the fire of individual nationalism and identity in the constituent national republics, who realized their own capabilities and powers beyond the communistic yet autocratic control of the Supreme Soviet.

The liberalization led indirectly to the revolutions of 1989 in which Soviet states first clamored to choose their representatives, not the Party-nominated candidates, to sit in the Soviet Legislature. In 1989 the Communist Party of the Soviet Union (CPSU) introduced limited competitive elections to a new central legislature, the Congress of People’s Deputies (although the ban on other political parties was not lifted until 1990). But the states wanted more. They wanted to make their own laws and rule their own lives. Protests for independence spread like wildfire in the 1990s.

In 1991, the leaders of three of the Union’s founding and largest republics (the Russian SFSR, the Ukrainian SSR, and the Byelorussian SSR) declared that the Soviet Union no longer existed, and eight more republics joined them shortly thereafter. Kazakhstan was the last nation to leave the Union, proclaiming independence on Dec. 16. All the republics, with the exception of Georgia and the Baltics, joined the CIS on Dec. 21, signing the Alma-Ata Protocol.

Gorbachev resigned. There was no more USSR. The former constituent national republics were just neighbors. Not one people, as Putin says of Russians and Ukrainians — contradictory to his assault on Ukraine today. What else can Russian air strikes and bombings, tanks plunging into Ukrainian border cities, the killing of civilians and young soldiers mean but that the Russian bully does not care for its own, if Ukraine were really its dearest brother. As of last Friday, Russia had not agreed to a ceasefire requested by Ukraine.

The world is aghast and angry at Putin’s aggression into Ukrainian territory and sovereignty, and his coddling and arming of Ukrainian separatist rebels who have pledged allegiance to him in exchange for successful secession and independence from Ukraine. Except for China, North Korea, and Cuba (all communist), nations have called the Russian attacks on Ukraine “criminal” and imposed economic and diplomatic sanctions on Russia. The United Nations Secretary General António Guterres qualified the decision of the Russian Federation “related to the status of certain regions of Ukraine” to be “a violation of the territorial integrity and sovereignty of Ukraine and inconsistent with the principles of the Charter of the United Nations” (ungeneva.org. Feb. 22, 2022).

In the midst of the anxieties of the two-year-long COVID-19 pandemic, there is a fear of the pandemonium and upheaval of a looming possible World War III. Pope Francis called for peace several times during Sunday Angelus in Rome and his weekly General Audiences, describing war as “madness” (Vatican News, Jan. 23, 2022). At the start of the Lenten season of the Church year, the Pope exhorted Christians to pray harder for Russia to relent and repent, for the conflict to end and for peace and harmony to again cover the world.

And no other can be praying harder for peace than Ukraine. It is an overwhelmingly Orthodox Christian nation, with nearly eight in 10 adults (78%) identifying as Orthodox (compared with 71% in Russia), according to a 2015 Pew Research Center survey. (Roman Catholics are 7.5% of some 38.4 million Christians [Catholics, Orthodox, Protestants] who make up 81.9% of the total population.)

The Pew Research Center says that “Orthodox Christianity is closely tied to Ukraine’s national and political life. Roughly half of all Ukrainians (51%) say it is at least somewhat important for someone to be Orthodox to be truly Ukrainian. The same is true for Russia, where 57% say being Orthodox is important to being truly Russian. In both countries, about half (48% in each) say religious leaders have at least some influence in political matters, although most Ukrainians (61%) and roughly half of Russians (52%) would prefer if this were not the case.

“The split between the Orthodox churches in the two countries is part and parcel of a wider history of political tensions between Russia’s geopolitical ambitions in the region and Ukraine’s resistance to them — even as some other predominantly Orthodox countries in Eastern Europe look toward Russia for political and religious leadership. For example, majorities of Orthodox Christians in countries such as Serbia (77%) and Georgia (62%) say Russia has an obligation to protect Orthodox Christians outside its borders, but fewer Orthodox Ukrainians (41%) feel this way,” the Pew research points out (https://www.pewresearch.org/fact-tank/2019/01/14).

In the time of the USSR, the Ukrainian Orthodox Churches were under the Moscow Patriarchate of the Russian Orthodox Church, meaning that the Russian Patriarch (who is like the Roman Catholic Pope) made the decisions on spiritual and temporal issues for the church and even the state. The political leaders and the church leaders coordinated and cooperated in ruling the people — but under the Soviet Party.

In 1990, the Ukrainian Christian community broke its shackles. When the constituent national republics were demanding autonomy and independence from the USSR, the local Ukrainian church leaders were the first and most decisive to initiate reforms. In January, the Ukrainian Greek-Catholic Church held its first synod since its liquidation by the Soviets in 1946 (an act which the gathering declared invalid). In April that year, the Lviv City Council voted to return St. George Cathedral to the Ukrainian Greek Catholic Church. The Russian Orthodox Church refused to yield. In June, Metropolitan Mstyslav of the Ukrainian Orthodox Church was elected patriarch of the Ukrainian Autocephalous Orthodox Church (UAOC) during that Church’s first synod. The UAOC declared its full independence from the Moscow Patriarchate of the Russian Orthodox Church, which in March had granted autonomy to the Ukrainian Orthodox church headed by the Metropolitan Filaret (from “Dissolution of the Soviet Union” — Wikipedia).

“More things are wrought by prayer than this world dreams of,” the poet Alfred Lord Tennyson (1809-1892) said.

Russia may well relent and repent — if the world prays fervently enough.

 

Amelia H. C. Ylagan is a doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Comparing platforms of presidential candidates

A presidential candidate’s socio-economic plan is his/her social pact with the people. It is their written commitment of projects and programs for which they can be held accountable for.

As enlightened voters, we should take the time to encourage those around us not to be swayed by social media propaganda. Rather, we must enjoin everyone to do their due diligence and vote for the candidate whose agenda best resonates with their values.

So far, I reviewed the socio-economic plans of candidates Robredo, Moreno, Lacson, and Pacquiao. I requested the Marcos camp for a copy of Marcos Jr.’s agenda as early as Dec. 15 but have received nothing. Recently, I was informed that they are still writing it even as we face the last mile of the campaign.

Manny Pacquiao’s socio-economic agenda consist of 22 areas that encompass housing, agriculture, youth development, and sports development, among others. Unfortunately, Pacquiao does not elaborate on his intentions for each, only to say that he will strengthen them. Neither did he define his targets or goals.

The more substantive socio-economic plans come from Robredo, Moreno and Lacson. Let me delve on the salient points of each.

THE ROBREDO PLAN
Vice-President Leni Robredo was the first to make her socio-economic agenda public. Entitled “Hanapbuhay para sa lahat” (Livelihood for All), the plan contains her targets, priorities and policies, all of which geared towards providing a source of livelihood for every Filipino. In one masterplan, Robredo ventures to solve the nation’s fundamental problems — poverty, unemployment, and income inequality. It is brilliantly crafted in that it addresses our rising debt and budget deficit threats while generating wealth for individuals.

The first item on the Robredo plan is to restore trust in government. Restoring trust means leveling the playing field, eliminating corruption and reverting to rule-based governance. With confidence restored, investments will flow, jobs will be created, and quality of lives will improve.

I was particularly delighted that Robredo prioritized the reactivation of the manufacturing sector. Dutertenomics and its import dependent, debt-driven route to economic expansion is simply unsustainable. We must manufacture more, produce more, and export more. Only then can we restore the health of our national balance sheet.

Robredo vows to develop new industries to future-proof the economy. She is the only candidate who promises this. Her plan is to make the Philippines a center for next-generation IT-KPO (Information technology-Knowledge process outsourcing) services. She also identified climate resilient agriculture and maritime-related industries as paths to growth.

Policy-wise, she intends to re-activate the National Competitiveness Council to recoup our lost grounds in national competitiveness; focus on implementing the Ease in Doing Business Act; strengthen the Philippine Competition Commission; speed-up the digitalization of government; pivot back to public private partnerships (PPP) in place of official development assistance (ODAs); and develop MSMEs by helping them climb the technology value chain.

Education is a vital part in the Robredo agenda. She commits to spend 5% of GDP on education, more than double the current level. Additional budgets will go towards expanding access to learning and improving STEM courses (science, technology engineering, mathematics).

THE MORENO PLAN
Isko Moreno’s socio-economic plan is entitled Bilis Kilos. It is a well-considered plan designed to pump-prime the economy while addressing the fundamental weaknesses of government institutions.

Mass housing is the cornerstone of the Bilis Kilos agenda. The intention is to allocate 1.3% of GDP towards the sector, 16 times more than what was spent in 2020. The goal is to build 4.5 million homes over six years. This will be accompanied by reforms in urban planning, the goal of which is to make our cities greener, more inclusive, and livable.

In education, Moreno aims to elevate the aptitudes of Filipino students to the level of their ASEAN peers. He commits to appropriate 4.3% of GDP for expanding the reach and quality of learning. In healthcare, Moreno intends to increase the salaries of public healthcare professionals to dissuade them from leaving the country. More hospitals will be built including those that specialize in mental illness (a neglected aspect of healthcare). The goal is to achieve a ratio of 1.7 beds for every 1,000 Filipinos.

The development of MSMEs (Micro-, Small- and Medium-sized Enterprises) will be achieved through a four-point plan which includes increasing available credit to entrepreneurs from P1.5 billion today to P30 billion; reduce the cost of doing business; facilitate ease in doing business and help MSMEs adopt to new technologies.

Moreno was the only one who cited tourism and creative industries in his plan. He aspires to increase the number of foreign visitors to 24 million per year by 2028. This will be done by strengthening tourism infrastructure and aggressive international promotions. He plans to host high-profile international events to boost the country’s global profile.

Creative industries include such sectors as furniture, fashion, homewares, etc. A national strategy for creative industries will be crafted to make it strong leg of the economy. All will start with the enactment of the Creative Industries Act.

On infrastructure, electric power will be given priority with the construction of more power plants from renewable sources. This will be complimented by the long overdue interconnection of the Luzon, Visayas, and Mindanao grids. As for water, the target is to attain 100% water access coverage by 2026.

The construction of roads and bridges will continue along with the expansion of the national broadband.

The Moreno plan is good but one that entails massive spending. We need to know how he intends to raise the funds given that Mr. Duterte has already elevated the national debt to its maximum tolerable level.

THE LACSON PLAN
Ping Lacson’s socio-economic plan is an interesting one. While it does not spell out his intentions for each sector of the economy, he dwells on the country’s core problems which he identifies as hunger, unemployment, education, rising debts, and the aftershocks of the pandemic. For Lacson, effective governance starts by having a competent, honest government.

If elected, Lacson will dedicate his first 100 days towards internal cleansing. In other words, ridding government of the inept, the corrupt, and the undisciplined.

To cushion the effects of the pandemic, Lacson plans to expand the Pantawid Pamilyang Pilpino Program so as to put the hungry and unemployed back on their feet. This serves two purposes — it helps those displaced by the pandemic while pump priming consumer spending from the bottom, up.

This will be followed by the professional implementation of Universal Healthcare Program. With a budget of P260 billion, Lacson promises to expand healthcare capacities to one bed for every 800 Filipino, provide one health station for every barangay, and one Rural Health Unit for every 20,000 citizens. He will also increase the salaries and benefits of frontliners and healthcare workers.

Lacson plans to reform the agricultural sector by providing subsidies for seeds, fertilizers, machinery, and irrigation. Unfortunately, he does not mention anything about migrating to technology-based farming which I think is the better route.

As for education, he promises to build one school in every barangay and proposes free college education complimented with a paid internship program.

Lacson is the only candidate that promised budget reform. The idea is to stop the corruption leakage which amounts to P700 billion a year.

These are what four of our presidential candidates have to offer in a nutshell. May we all make an informed choice.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

Pag-IBIG declares record-high P31.79B as 2021 dividends

Regular Savings at 5.5%, MP2 at 6%

The Pag-IBIG Fund Board of Trustees has approved the dividend for members’ savings for 2021, declaring a record-high amount of over P31 billion which shall be credited directly to its members’ savings accounts, top executives announced on Friday, March 11.

“During the Pag-IBIG Chairman’s Report last February 24, I announced that the rates of Pag-IBIG Savings remained higher than other instruments in the market. This announcement came with a caveat that these were to be approved by the Board. And now, I’m happy to announce once again that the Pag-IBIG Board has approved dividends for our members’ savings in the amount of P31.79 billion – the highest declared amount in the history of PagIBIG! The Board also adjusted upwards the previously announced indicative rates. The final dividend rates are now 5.5% for the Pag-IBIG Regular Savings and 6% for MP2. Giving higher returns on members’ savings is part of our efforts to give the best benefit to our members, especially as they face economic challenges due to the ongoing pandemic, while ensuring the Fund’s sustainability and stability”, said Secretary Eduardo D. del Rosario who heads the Department of Human Settlements and Urban Development and the 11- member Pag-IBIG Fund Board of Trustees.

Meanwhile, Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti explained that the higher rates are a result of a higher dividend pay-out ratio approved by the Board. He said that while the agency is required to give back to members only at least 70% of its annual net income as dividends, the Management and the Board always sought to give back more.

“Pag-IBIG Fund has always looked out for the wellbeing of our members. And when we perform well, it’s our members who benefit the most. For 2021, I’m glad to say that the Board decided to retain the highest payout ratio of 92.15%. We are able to do this for the second consecutive year because of our strong financial position and improving loan portfolio despite the economic effects of the pandemic. We, the Management, thank all members of the Board for recognizing the Fund’s efforts to maintain a stable Fund. We also recognize that the members themselves – their trust and confidence in the Fund’s programs – helped us deliver a great performance year after year. This is your Lingkod Pag-IBIG at work when you need us most,” Moti said.

 

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Online cockfighting wagers rake in billions

PHILSTAR

The roosters stood inches apart, hook-shaped blades strapped to their legs. Cameras surrounded a dirt ring, streaming the fight to thousands of online gamblers huddled over cell phones across the Philippines.

A referee shadowed the animals as they tore out feathers, pounded air and nipped at vulnerable parts of the neck. Less than a minute later, the match was over and a winner declared. The victor squawked over the body of the defeated.

Cockfighting, in which two roosters spar to the death, has become an online craze in the Philippines. Once a declining bloodsport, the centuries-old game is now a major industry across this Southeast Asian nation, pulling in millions of dollars in bets a day and attracting a new generation of gamblers.

Its resurgence in the Philippines, the only country in the world that accepts online bets for game fowl, has shaken traditional players on the casino floor.

Matches are drawing in more monthly revenue than the local ventures of gambling behemoths Melco Resorts & Entertainment Ltd. and Genting Hong Kong Ltd. Investors are taking notes, with countries from Mexico to Papua New Guinea mulling forays into online betting, according to people in the industry.

A taboo in much of the West, cockfighting holds no such stigma in the Philippines, where fights can attract crowds on par with U.S. baseball games or British rugby matches. Cashing in on a surge in popularity, Resorts World Manila, which is owned by tycoon Andrew Tan, opened a betting station in its casino. Two other resort developers are expected to do the same.

At the center of the phenomenon is Charlie “Atong” Ang, a freewheeling fitness buff and the brain behind Pitmasters Live, the top-shelf brand of online cockfighting. His group streams matches round-the-clock, averaging around 350 a day and partnering with breeders across the country. Digital payment platforms and hundreds of agents facilitate access to the Pitmasters webcast, take wagers and disburse winnings.

With minimum bets set at less than $2, online cockfighting is affordable and instantaneous, a sellable diversion for the country’s video game generation. But the industry’s rapid rise is also the story of ruined lives and addiction, of a tug-of-war with regulators and backlash from international animal rights groups.

A senior church official from the Catholic Bishops’ Conference of the Philippines called online cockfighting “one of the most disastrous things ever allowed by the government.” Lawmakers are investigating the disappearance of more than two dozen gamblers, prompting some to propose suspending the sport until cases are solved.

Mr. Ang waved off criticism. In the rough-and-tumble world of cockfighting, he said, bets should only be placed with “your laughing money.”

“Anything that’s more than what we need is addiction — be it food or money,” he said. “Let’s not be hypocrites.”

THE ‘NBA’ OF COCKFIGHTING

Cockfighting has an expansive history in the Philippines, predating the exploits of Ferdinand Magellan, the Portuguese explorer who landed on the shores of this island nation more than five hundred years ago.

Though illegal in most of the world, sabong, as the game is known locally, has a devoted following in the Philippines. Every year, scores of people gather to watch the World Slasher Cup, a multi-day series of matches held in a coliseum in metro Manila. The event has all the corporate trappings of a modern sports tournament, complete with giant inflatable roosters and a soundtrack that tends to favor “Eye of the Tiger.”

In recent years, the game has waned in popularity. Government rules limit fights with in-person spectators to Sundays and holidays. Cockpits raised entry costs for bettors. When COVID lockdowns shuttered businesses, the country’s most ambitious gaming operators, who had already started streaming matches, sensed an opportunity: Why not digitize many more of them?

“Online cockfighting wouldn’t be this big were it not for the pandemic and the game’s accessibility through mobile phones,” said Claire Alviar, an analyst at Philstocks Financial Inc. in the Philippines.

The sport’s spike in popularity is really the rise of Pitmasters, which has a near-monopoly on the business model. According to data from Mr. Ang, the group generates more than 700 billion pesos ($13.4 billion) annually in wagers. That figure is more than double the estimated gross gaming revenue of the country’s casinos in 2019, based on figures provided by the Philippine Amusement & Gaming Corp.

“We are the superstar of sabong. We are the NBA of this sport,” he said, likening his brand to the US National Basketball Association.

The purported profits are staggering. The platform collects an average of 2 billion pesos to 3 billion pesos each day, according to Ang. Of that amount, 95% goes to bettors as winnings and the remaining 5% to Pitmasters and its agents as commission. Another 135 million pesos is paid as a monthly tax to the state-run gaming regulator, which has used funds to fight the pandemic.

Mr. Ang, 63, said his group’s revenue each month is P1.5 billion, a huge sum considering Bloomberry Resorts Corp., which operates one of the country’s biggest casinos, pulled in profits of about P10 billion in 2019.

Agents who joined Pitmasters early stumbled into a modern-day gold rush.

Within weeks of starting his job in Aug. 2020, one said he was earning at least 3 million pesos a month, or nearly $60,000 — more than enough to buy a new car and house. After technology giant Globe Telecom Inc. started facilitating bets and linking games to its platform, cutting out the need for middlemen, his pay fell to a more modest $2,300.

“It was easy to sell online sabong,” said the agent, who uses the alias Edwin Cruz. “The pandemic provided great timing because many Filipinos are gamblers and they were stuck at home getting bored.”

THE RINGLEADER

Mr. Ang has spent practically his entire life in the business. As a teenager, he frequented cockpits and casinos. During the reign of former president Joseph Estrada, he worked as a consultant for the government’s gaming regulator.

His reputation is checkered. In 2001, Mr. Estrada was ousted from office after evidence surfaced that Mr. Ang had helped him divert P130 million in tobacco taxes. With pressure building, Ang fled to the US, where he was caught gambling in Las Vegas and placed under house arrest. In 2006, he was extradited to the Philippines and later pleaded guilty to a corruption charge.

After serving time in jail, Mr. Ang sought to reinvent himself. In 2019, he drafted his business plan, drawing inspiration from off-track betting for racehorses and the success of online casinos. He studied laws governing cockfighting and convinced the city of Manila to allow him to set up offsite betting stations.

When the pandemic shut down the world, Mr. Ang pounced. He started streaming matches with the blessing of the government. Globe Telecom’s GCash and later PLDT Inc.’s Paymaya joined to process payments. Last September, the House of Representatives approved a 25-year franchise application for Pitmasters. Its fate now rests with the senate.

“There’s a lot of room for expansion,” Mr. Ang said, estimating that his 900 betting stations cover only 20% of the Philippine archipelago.

DEBTS, DEATHS AND DISAPPEARANCES

Still, the sudden success of online cockfighting has engendered scrutiny and lurid tales of bets gone awry.

In the coastal town of Hagonoy, a man stabbed to death his 87-year-old neighbor after he refused to lend him money. At a press conference, Senator Panfilo Lacson recounted the story of a gambler who killed himself after accumulating debt totaling 600,000 pesos.

In response to the disappearance of a few dozen people last seen at cockfighting arenas, the senate recently summoned Mr. Ang for questioning. In January, at a Pitmasters cockpit in Manila, a grenade was found. “We have nothing to do with these incidents,” Mr. Ang said.

As investigators probe further, the industry’s future is unclear. Ahead of presidential elections in May, Leni Robredo, one of the leading candidates, said she’s generally not in favor of gambling. The frontrunner, Ferdinand Marcos Jr., has yet to publicly comment on the issue.

Then there are the animal rights advocates who find the sport unconscionable. To amp roosters for a fight, breeders sometimes slip cayenne pepper into their anuses. Jason Baker, a senior vice president at the People for the Ethical Treatment of Animals, or PETA, lamented the rise of e-sabong.

“Moving this cruel and unethical practice online is a desperate move by a dying industry,” he wrote in an email. “Birds are mutilated, injected with steroids, and forced to fight until their unnecessary death.”

To this, Mr. Ang scoffed. His company has given more than 800 million pesos to charity. Not only is the sport honorable, he said, but it is here to stay.

“Among the games you can bet on, cockfighting’s 50-50 odds of winning is the best there is,” Mr. Ang said. “They say gambling is bad, but why are casinos, liquor and cigarettes legal? It’s because they’re paying taxes.” — Cecilia Yap and Clarissa Batino/Bloomberg

A dozen new mines to begin operations this year, mostly nickel

DAVID HELLMANN-UNSPLASH

About 12 new metallic mines should begin commercial operations this year, mostly nickel projects, adding to a “bright” outlook for a sector enjoying cash windfall from high prices, the local industry regulator said on Friday.

The Mines and Geosciences Bureau (MGB) also said in a report the Philippines’ nickel output last year totaled 386,359 tonnes, 17% higher than the previous year’s production and the highest in six years. 

The Philippines has been China’s biggest supplier of nickel ore after Indonesia banned exports of the material from 2020, to try to develop a full supply chain that includes processing of the metal used in stainless steel and batteries for electric vehicles. 

The medium-term outlook for the mining industry is rosy “unless the war in Ukraine will spill over to Asia and cause disruption to trade,” MGB Director Wilfredo G. Moncano said.

He is hopeful the next administration will support policies of President Rodrigo R. Duterte, whose term ends in June, including ending a four-year-old ban on open-pit mining for copper, gold, silver and complex ores.

While existing local nickel miners “have always been operating at an optimum capacity”, the entry of new producers will increase domestic ore output, said Dante R. Bravo, president of Global Ferronickel Holdings Inc., the country’s second-largest nickel ore miner.

Despite high metals prices, however, Mr. Bravo told Reuters challenges remain for a local industry now burdened by rising fuel prices, higher inflation, a manpower shortage, supply chain disruption and potentially, rising freight charges. — Reuters

Obesity policy to be approved in April

UNSPLASH

A National Policy on Addressing Overweight and Obesity is in its final review stage, and is scheduled for approval in April by the governing board of the next National Nutrition Council (NCC).

The multisectoral policy addresses the growing obesity rates in the Philippines by providing guidance for population-based approaches for prevention, mechanisms to influence the food environment, and management of existing cases of obesity.

Around 27 million Filipinos are overweight and obese, based on the latest survey of the Department of Science and Technology’s Food and Nutrition Research Institute.

Whether or not the over 50 genes associated with obesity are activated in individuals depends on their exposure to environmental factors such as nutrition, stress, physical activity.

“Developing countries have the same issues. Are there more options [for healthy living], more investment in infrastructure for making better choices? Not so much,” said Dr. Miroslava Guajardo, senior medical manager of Novo Nordisk Southeast Asia, in a March 4 webinar organized by the same pharmaceutical firm.

“We have so much to do in terms of awareness,” she added.

Southeast Asian countries share an increasing prevalence of obesity, which has been recognized as a chronic disease since 2013. More than 30 million individuals in the region live with obesity.

Aside from setting national policy, NCC also coordinates the Philippine Plan of Action for Nutrition (PPAN), the 2023–2028 iteration of which will focus on childhood obesity. (The 2017–2022 PPAN addresses childhood stunting, which has remained high for the last three decades.)

The NCC also recently approved the Philippine Nutrient Profile Model, which will provide guidance in determining food and beverages that can be marketed to children and as the basis for front-of-pack labeling of food products, according to Azucena M. Dayanghirang, NCC executive director assistant secretary.

“This tool is intended to influence food manufacturers to produce and reformulate to offer healthier food to consumers,” she said in a press statement.

Dr. Mia C. Fojas, an endocrinologist with Medical Center Manila, reminded parents to be role models for their children. Children don’t buy their own food, she said at the March 4 webinar.

“A lot of children tell me, ‘Daddy doesn’t eat vegetables. Why should I?’” she said.

Dr. Fojas also noted the need to incorporate physical activity in one’s lifestyle with the acronym SIPA or “short incidental physical activity.” “Move more, use the stairs more,” she said.

Among the local governments that have heeded the call to provide spaces for physical activity include Iloilo City, whose esplanade has promoted walkability among its residents, and Marikina City, which has introduced a bikeway system that also facilitates people-to-people interaction. — Patricia B. Mirasol

Facebook allows Ukraine war posts urging violence against invading Russians, Putin

REUTERS

Meta Platforms will allow Facebook and Instagram users in some countries to call for violence against Russians and Russian soldiers in the context of the Ukraine invasion, according to internal e-mails seen by Reuters on Thursday, in a temporary change to its hate speech policy. 

The social media company is also temporarily allowing some posts that call for death to Russian President Vladimir Putin or Belarusian President Alexander Lukashenko, according to internal e-mails to its content moderators. 

“As a result of the Russian invasion of Ukraine we have temporarily made allowances for forms of political expression that would normally violate our rules like violent speech such as ‘death to the Russian invaders.’ We still won’t allow credible calls for violence against Russian civilians,” a Meta spokesperson said in a statement. 

The calls for the leaders’ deaths will be allowed unless they contain other targets or have two indicators of credibility, such as the location or method, one e-mail said, in a recent change to the company’s rules on violence and incitement. 

Citing the Reuters story, Russia’s embassy in the United States demanded that Washington stop the “extremist activities” of Meta. 

“Users of Facebook & Instagram did not give the owners of these platforms the right to determine the criteria of truth and pit nations against each other,” the embassy said on Twitter in a message that was also shared by their India office. 

The temporary policy changes on calls for violence to Russian soldiers apply to Armenia, Azerbaijan, Estonia, Georgia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, and Ukraine, according to one e-mail. 

In the e-mail recently sent to moderators, Meta highlighted a change in its hate speech policy pertaining both to Russian soldiers and to Russians in the context of the invasion. 

“We are issuing a spirit-of-the-policy allowance to allow T1 violent speech that would otherwise be removed under the Hate Speech policy when: (a) targeting Russian soldiers, EXCEPT prisoners of war, or (b) targeting Russians where it’s clear that the context is the Russian invasion of Ukraine (e.g., content mentions the invasion, self-defense, etc.),” it said in the e-mail. 

“We are doing this because we have observed that in this specific context, ‘Russian soldiers’ is being used as a proxy for the Russian military. The Hate Speech policy continues to prohibit attacks on Russians,” the e-mail stated. 

Last week, Russia said it was banning Facebook in the country in response to what it said were restrictions of access to Russian media on the platform. Moscow has cracked down on tech companies, including Twitter, which said it is restricted in the country, during its invasion of Ukraine, which it calls a “special operation.” 

Many major social media platforms have announced new content restrictions around the conflict, including blocking Russian state media RT and Sputnik in the European Union, and have demonstrated carve-outs in some of their policies during the war. 

E-mails also showed that Meta would allow praise of the right-wing Azov battalion, which is normally prohibited, in a change first reported by The Intercept. 

The Meta spokesperson previously said the company was “for the time being, making a narrow exception for praise of the Azov Regiment strictly in the context of defending Ukraine, or in their role as part of the Ukraine National Guard.” — Munsif Vengattil and Elizabeth Culliford/Reuters

Priests opposed to Marcos turn pink

FERDINAND “BONGBONG” R. MARCOS, JR. -- REUTERS

WHEN Philippine Catholic priest Father Nap Baltazar raised his hands to bless the people attending mass, the sleeves on his white vestment slid back to reveal a pink bracelet inscribed with the words “Let Leni Lead.”

Fr. Baltazar, 47, belongs to a group of like-minded priests in Asia’s biggest Catholic nation who have abandoned their neutrality to oppose the presidential bid of Ferdinand “Bongbong” R. Marcos, Jr., the late dictator’s son and namesake, and openly endorse his closest rival Maria “Leonor” Leni G. Robredo, whose team color is pink.

The presidential election is set for May 9, and latest opinion polls show Mr. Marcos holds a double-digit lead over closest rival Ms. Robredo, while his running mate, Sara Duterte-Carpio, daughter of incumbent President Rodrigo R. Duterte, remained the top choice for the vice presidency.

“I will do everything I can to make sure he does not sit as president,” Fr. Baltazar said of the 64-year-old Mr. Marcos.

The priest, who says he has never before campaigned publicly for a politician since being ordained, drives a van adorned with an image of Ms. Robredo and the words “Pray and Choose Wisely. Your future depends on it” written in pink.

Back in 1986, the Catholic Church championed a “People Power” uprising that overthrew Mr. Marcos’s father and drove his family to exile.

But now, Marcos Jr., a former congressman and senator, appears poised to clinch the presidency, following a decades-long political fight back by a family accused of leading one of Asia’s most notorious kleptocracies.

The elder Marcos ruled for two decades, almost half of it under martial law during which thousands of his opponents were beaten and tortured, and disappeared or were killed.

UNTHINKABLE 

Ms. Robredo, 56, narrowly defeated Mr. Marcos in the 2016 vice presidential contest. She is the leader of the opposition and the only female candidate in this year’s presidential race.

A former human rights lawyer, she has been a thorn in Mr. Duterte’s side, questioning his war on drugs, his embrace of China and recently the handling of coronavirus disease 2019 (COVID-19). “Leni happens to encapsulate the values of the Church and that is why I am not afraid to show my face and support her,” said Father Edwin Gariguez, while meeting with people in his diocese in Calapan, south of the capital, in a pink mask and pink shirt promoting Ms. Robredo.

The return of a Marcos to the country’s seat of power is unthinkable for millions of Filipinos, including for Father John Era, who started the “Pari, Madre, Misyonero Para Kay Leni (Priests, Nuns and Missionaries for Leni),” hoping to use their “influence” to rally support behind her.

Mr. Marcos has been campaigning on a promise to bring unity to the Philippines but is not entertaining questions about atrocities during his father’s rule, which his critics say his family has neither apologized for, nor properly acknowledged.

“While presidential candidate Bongbong Marcos is calling for unity, we are saddened by the men and women of the Catholic clergy who are doing the exact opposite and have abused the pulpit, allowing it to become a platform for hateful and negative campaigning,” his spokesman, Victor Rodriguez, said.

“As men and women of the cloth, they should be more circumspect, refrain from openly meddling with politics and stop making reckless imputations or statements that only serve as spiritual, moral, social and cultural poison,” he added.

The Catholic Church, which also participated in a popular movement in 2001 that led to the ouster of another president, Joseph E. Estrada, is at the Philippines’ core.

Four-fifths of the nation’s over 110 million population are Catholics, and many still practice their faith with gusto.

PARTISAN POLITICS 

Not everyone in the Church approves of the priests’ actions, which have also drawn mixed reactions from Filipinos, who have taken to social media to either praise or decry the clergymen for taking political sides.

Father Jerome Secillano, Public Affairs executive secretary at the Catholic Bishops Conference of the Philippines (CBCP), said the Church law forbids clergymen from engaging in partisan politics, and the role of the Church and clerics is “only for education and formation of consciences.”

Leaders of other religious groups in the Philippines, like the Kingdom of Jesus Christ and El Shaddai, which politicians have courted in the past because their members are known to follow their leaders’ advice, have also come out to back Mr. Marcos’s candidacy.

And while Bishop Pablo Virgilio David, the president of CBCP, said the Church would not dictate who its members should vote for in the election, he has hinted which side he favors.

During a mass on Feb. 8 at his diocese in Caloocan, he gave his blessing over the decision of its lay leaders to support Ms. Robredo. “It is not right to be neutral when truth and the country’s future are at stake,” said the bishop, who was wearing a pink face mask. “To be neutral means that you support evil.” — Karen Lema/Reuters

Ukraine is model for Taiwan defense should China violate its ‘sovereignty’ — US official

REUTERS

WASHINGTON — Ukraine’s stiff resistance against the invasion by Russian forces could be a model for Taiwan to defend itself should China choose to violate the island’s “sovereignty” by attacking, a senior US defense official told a Senate hearing on Thursday.

The United States, like most countries, does not have formal ties with Taiwan but is its main arms supplier, and has long urged it to buy cost-effective and mobile defense systems — so-called “asymmetric” weapons — to counter China’s more powerful military.

“I think the situation we’re seeing in Ukraine right now is a very worthwhile case study for them about why Taiwan needs to do all it can to build asymmetric capabilities, to get its population ready, so that it can be as prickly as possible should China choose to violate its sovereignty,” said Mara Karlin, assistant secretary of defense for strategy, plans and capabilities.

Under the United States’ “one China” policy, Washington only acknowledges China’s stance that the island belongs to it, but takes no position on Taiwan’s sovereignty.

China bristles at any reference to democratically self-governed Taiwan as independent, and Beijing’s ambassador to Washington warned in January that US encouragement of independence could trigger a military conflict between the two superpowers.

Asked about Ms. Karlin’s remark to the Senate Foreign Relations Committee, a spokesman for China’s embassy in Washington, Liu Pengyu, said some in the United States have abetted forces for Taiwan independence in a bid to hold back China’s rejuvenation.

“This would not only push Taiwan into a precarious situation, but also bring unbearable consequences for the US side,” Mr. Liu said in an e-mail.

Jessica Lewis, assistant secretary of state for political-military affairs, told senators that the United States continues to urge Taiwan to procure asymmetric systems, which had been “used to great effect in Ukraine.”

Taiwan needs to prioritize short-range air defense, naval sea mines and coastal defense and cruise missiles, Ms. Lewis said, adding that the United States and Taiwan were increasingly seeing eye-to-eye on what qualified as an asymmetric system.

“We’re working with them on that today. I think we have a much deeper understanding of that right now,” Ms. Lewis said.

Ms. Lewis said Taiwan also needed to take a cue on reserve force reforms from Ukraine, which has volunteer territorial defense units and around 900,000 reservists, and that its population “has to be ready to fight.”

“Obviously we don’t want there to be a conflict in Taiwan,” Ms. Lewis said. Taiwan has just created “an all-out defense mobilization organization” and is working with the US National Guard in the development stage, Ms. Lewis said. — Michael Martina/Reuters

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