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Rate hike unlikely in first half of 2022, says Diokno

THE PHILIPPINES’ central bank is unlikely to increase policy rates in the first half of this year as it waits for the economic recovery to become entrenched and unemployment to fall, according to central bank Governor Benjamin E. Diokno.

“After the performance in the first two quarters of the year, that’s when we seriously look at whether we will make some adjustments,” Mr. Diokno said in an interview on Tuesday. “We want to make sure that the economy is recovering well.”

Like central bankers globally, Southeast Asian policy makers are juggling the prospects of a faster US rates liftoff and the threat from a quick-spreading coronavirus variant, as well as regional developments such as the People’s Bank of China pledging greater support for its economy and sustaining accommodative policies.

“There is no ‘one size fits all’ on what’s happening,” Mr. Diokno said, when asked how faster rate increases by the US Federal Reserve will impact emerging-market central banks.

The governor said the Bangko Sentral ng Pilipinas typically likes to see four to six quarters of steady economic growth and unemployment around 5% before considering raising rates. Gross domestic product has posted two consecutive quarters of year-on-year growth — including, most recently, 7.1% expansion in the July-September period — while the unemployment rate hit 6.5% in November, the lowest since the pandemic began.

The Philippines’ key interest rate has been at a record-low 2% for more than a year, withstanding mounting inflation in 2021. Ample foreign-exchange reserves and manageable government debt provide some cushion against tighter financial conditions worldwide, said Mr. Diokno, who recently was named central banker of the year by The Banker magazine.

The governor said the economy can grow within the government’s 7%-9% forecast this year, with inflation set to slow to near the midpoint of the central bank’s 2%-4% target.

If the economy needs more support, a cut to the benchmark rate is unlikely, Mr. Diokno said. Instead, policy makers can consider tweaks to banks’ reserve requirement ratio (RRR), either in the form of direct cuts to the ratio or an easing of compliance rules, he said.

Policy makers are next scheduled to set the key rate on Feb. 17.

Mr. Diokno has said a potential RRR cut remains on the table, as the central bank reduced its direct budget support to the government and its bond buying in the secondary market. The monetary authority’s loans to the government are likely to end this year, he said on Tuesday.

PESO RANGE
Foreign-exchange strategists see the peso under pressure as the central bank aims to keep monetary policy accommodative while the Fed turns hawkish. The local currency has lost about 0.5% against the greenback so far this year.

Mr. Diokno said he’s “very comfortable” with the peso trading in a range of P48-53 per dollar, adding that the currency is unlikely to weaken beyond P53.

Going forward, Mr. Diokno said fiscal policy should be able to do the “heavy lifting” to support the economy through the pandemic, advice he said could apply to most countries.

“A governor should know the limits of monetary policy,” Mr. Diokno said. “You may be good, but you’re not superman. You can’t solve all the problems.” — Bloomberg

PHL gets ADB grant to craft ‘growth strategy’

THE ASIAN Development Bank (ADB) has approved a $225,000 grant to the Philippine government to create an economic growth strategy to help reach its target of becoming a high-income country in two decades.

The ADB in a document said the grant was approved on Dec. 28.

“The technical assistance will support the Philippines’ Department of Finance (DoF) formulate a growth strategy that will guide necessary structural reforms to lift potential growth and create skilled jobs,” the ADB said.

“The socioeconomic impacts of the coronavirus disease (COVID-19) pandemic created many development challenges. This strategy will identify new sources of sustained growth that will help the Philippines consistently achieve a real GDP (gross domestic product) growth to become a high-income country in the 2040s.”

Project outputs include an economic complexity analysis and services for the country’s long-term growth strategy.

The ADB noted that the Philippine economy contracted by 9.6% in 2020 due to the pandemic’s impact.

The multilateral lender said the economy started to recover in the second quarter last year, with investment and household consumption as strong contributors.

“Progress in vaccination is helping restore consumer and business confidence. An expansionary fiscal policy continues to support growth, especially infrastructure investment,” the ADB said.

The Philippine government’s AmBisyon Natin 2040 crafted in 2016 is a plan to eliminate poverty and make the country a predominantly middle-class society. — Jenina P. Ibañez

New consortium gets original proponent status for Sangley airport project

By Arjay L. Balinbin, Senior Reporter

SPIA Development Consortium, a newly formed group that seeks to develop the Sangley Point International Airport, announced on Tuesday that it had been granted original proponent status for the project.

The provincial government of Cavite has “formally accepted” the proposal, the group said in an e-mailed statement to reporters, adding that it has also been granted original proponent status, or OPS.

“The grant of the OPS gives the consortium the right to directly negotiate the final terms and conditions of the joint venture with the province as well as the right to match the best counter proposal that may be received during the 60-day mandatory competitive or Swiss challenge process,” it noted.

The group said Cavite Governor Juanito Victor “Jonvic” C. Remulla issued the certificate of acceptance to the consortium on Jan. 7.

The governor was quoted as saying the acceptance of the unsolicited proposal is a “clear sign” of the province’s commitment to delivering the project to the Filipino people.

“We are very glad and hopeful that this consortium made up of reputable domestic and well-known global development and investment companies will help us successfully complete the project,” he also said.

The Cavite province previously declared a second failed bidding because no bids came in after the Oct. 20 deadline.

SPIA Development Consortium announced in November that it submitted its own unsolicited proposal for the airport project.

The consortium is composed of Philippine developers and investors as well as global firms. The local lead members are Cavitex Holdings, Inc. and Yuchengco Group of Companies.

MacroAsia Corp., a non-equity member, will provide management and technical services for aviation support as well as the logistics component of the project, the consortium said.

The global firms involved are Samsung C&T Corp., which built the Petronas Twin Towers in Kuala Lumpur and the Burj Khalifa in Dubai, and Munich Airport International GmbH, the management services arm of Munich Airport.

Arup Group, a London-based design company, is also a member of the consortium.

“The long-delayed Sangley Airport project is envisioned as a fully modernized, world-class and green airport that is designed to meet an anticipated increase in demand for air transport in the next 30-40 years, and as operations at NAIA (Ninoy Aquino International Airport) are eventually phased out to allow for a development of the site and its surrounding areas,” the consortium said.

“After final planning, design and financial closing, the work would immediately begin with the construction of a 4.6-kilometer connector road from the Kawit Interchange of Cavitex that would lead to Sangley, with the time of completion estimated at two years, the consortium affirmed,” it added.

MacroAsia and its partner China Communications Construction Co. Ltd. had negotiated with Cavite for the project in 2020, but the latter canceled its notice of selection and award in January 2021 due to the “various deficiencies in the submission of requirements to conclude the joint venture agreement.”

The province had issued a new invitation for firms to submit joint venture proposals for the airport project but received no bids.

Sore throat? Stay home

PIXABAY

By Brontë H. Lacsamana 

DON’T DISREGARD a sore or scratchy throat, health experts said on Friday, as it may be an early sign of the highly transmissible Omicron variant. 

Those with mild to moderate symptoms, like fever, colds, cough, body pains, headache, and sore throat should immediately isolate and use telemedicine services so as not to increase risk of transmission in public.  

“If you start to have symptoms, do not go to work, do not ride on public transport, and do not go to the mall,” said Dr. Teodoro J. Herbosa, special advisor of the National Task Force for COVID-19 (coronavirus disease 2019).   

Asymptomatic, mild, and moderate patients must isolate for 10 days while severe and critical patients must isolate for 21 days, according to home quarantine guidelines released on Friday by the Department of Health in light of the rise in hospitalizations due to the surge in COVID-19 cases.   

Household members should follow minimum public health standards at home, like wearing face masks, proper hand hygiene, and physical distancing of at least one meter away from others.  

With these protocols, an overwhelmed health system can be avoided, as hospital utilization is at 40% or 50%, according to Mr. Herbosa. 

‘CAUTIOUS OPTIMISM’ 
Based on past surges, the Philippines may reach its peak of coronavirus cases in January or February, according to a panel. 

“Note that the mixture of the holiday season, ongoing Delta, and potential Omicron are factors that brought us to where we are today,” said Dr. Benjamin G. Co, a pediatric infectious diseases expert, at a webinar on Jan. 7. He added that cautious optimism is the way to go, noting that the surge “should end somewhere.”  

On Monday, the country recorded its highest daily number of infections of more than 33,000. On New Year’s Day, the Philippines saw over 3,600 cases, following an average of under 500 infections pre-holidays. The National Capital Region (NCR) is under alert level 3 until Jan. 15.  

Since Omicron is the latest variant of concern, information is still limited as to whether vaccines will be effective against it. However, the currently available vaccines offer significant protection against severe disease and death, said Dr. Co.   

“How to protect against Omicron? Reduce our risk of exposure to the virus by responsibly making sure that our mobility is well thought of,” he said.  

Fredegusto Guido P. David, a University of the Philippines scientist and OCTA research fellow, suggested that the dramatic increase in cases and “critical-level” positivity rate of over 50% in the NCR could indicate a similar situation as South Africa. There, the rise in cases was followed by a steep decrease.  

“That’s the best-case scenario for the Philippines,” he said. “It’s possible that we could be closing in on the peak but we just don’t know.”  

On Jan. 9, Mr. David tweeted more cautious optimism: “We will know in the next few days if the positivity rate is indeed slowing down … If the increase in positivity rate is slowing down, then the peak in the NCR might occur within the week. Let us hope that is the case.” 

US man recovering after ‘breakthrough’ pig-heart transplant

Illustration of human heart by Patrick J. Lynch, medical illustrator/CC BY 2.5/Wikimedia Commons

CHICAGO — A US man with terminal heart disease was implanted with a genetically modified pig heart in a first-of-its-kind surgery, and three days later the patient is doing well, his doctors reported on Monday.  

The surgery, performed by a team at the University of Maryland Medicine, is among the first to demonstrate the feasibility of a pig-to-human heart transplant, a field made possible by new gene editing tools.  

If proven successful, scientists hope pig organs could help alleviate shortages of donor organs.  

“This was a breakthrough surgery and brings us one step closer to solving the organ shortage crisis. There are simply not enough donor human hearts available to meet the long list of potential recipients,” Dr. Bartley Griffith, who surgically transplanted the pig heart into the patient, said in a statement.  

“We are proceeding cautiously, but we are also optimistic that this first-in-the-world surgery will provide an important new option for patients in the future,” Dr. Griffith added.  

For 57-year-old David Bennett of Maryland, the heart transplant was his last option.  

“It was either die or do this transplant. I want to live. I know it’s a shot in the dark, but it’s my last choice,” Mr. Bennett said a day before his surgery, according to a statement released by the university.  

To move ahead with the experimental surgery, the university obtained an emergency authorization from the US Food and Drug Administration on New Year’s Eve through its compassionate use program.  

“The FDA used our data and data on the experimental pig to authorize the transplant in an end-stage heart disease patient who had no other treatment options,” said Dr. Muhammad Mohiuddin, who heads the University’s program on xenotransplantation — transplanting animal organs into humans.  

About 110,000 Americans are currently waiting for an organ transplant, and more than 6,000 patients die each year before getting one, according to organdonor.gov.  

Mr. Bennett’s genetically modified pig heart was provided by Revivicor, a regenerative medicine company based in Blacksburg, Virginia. On the morning of the surgery, the transplant team removed the pig’s heart and placed it into a special device to preserve its function until the surgery.  

Pigs have long been a tantalizing source of potential transplants because their organs are so similar to humans. A hog heart at the time of slaughter, for example, is about the size of an adult human heart.  

Other organs from pigs being researched for transplantation into humans include kidneys, liver and lungs.  

Prior efforts at pig-to-human transplants have failed because of genetic differences that caused organ rejection or viruses that posed an infection risk.  

Scientists have tackled that problem by editing away potentially harmful genes.  

In the heart implanted in Mr. Bennett, three genes previously linked with organ rejection were “knocked out” of the donor pig, and six human genes linked with immune acceptance were inserted into the pig genome.  

Researchers also deleted a pig gene to prevent excessive growth of the pig heart tissue.  

The work was funded in part with a $15.7-million research grant to evaluate Revivicor’s genetically-modified pig hearts in baboon studies.  

In addition to the genetic changes to the pig heart, Mr. Bennett received an experimental anti-rejection drug made by Kiniksa Pharmaceuticals based in Lexington, Mass. — Reuters

PSEi seen to reach 8,100 by yearend

BW FILE PHOTO

By Keren Concepcion G. Valmonte, Reporter

FIRST Metro Investment Corp. (FMIC) is expecting the benchmark Philippine Stock Exchange index (PSEi) to potentially hit an 8,100 high in 2022.

In a briefing on Tuesday, FMIC said it is expecting the 30-member PSEi to post a 13% to 15% growth this year, to close around 7,900 to 8,100 by yearend.

“The biggest event that is yet to be priced in by the PSEi is the fact that we are going to be returning to the pre-pandemic GDP (gross domestic product) by the end of this year,” FMIC Vice-President and Research Head Cristina S. Ulang said.

FMIC is expecting the economy to go “back on track” this year with a GDP growth of 6% to 7%, on the back of sustained domestic demand, easing inflation, election-related spending, and the government’s spending on the country’s infrastructure projects.

However, some of the key risks for the stock market include new coronavirus disease 2019 (COVID-19) variants, high inflation, higher interest rates, the slowdown of global economic growth, and power supply shortage.

Ms. Ulang said there are “so many industries that are very promising and buoyant during election years.” This includes durable equipment, construction, finance or insurance, information and communications technology (ICT), communication, restaurant and hotels, recreation and culture, electricity, and the wholesale or retail industries.

Election years also point to “possible” foreign buying. Some of the election spending stock beneficiaries FMIC named are Universal Robina Corp., Jollibee Foods Corp., Ginebra San Miguel, Inc., Bloomberry Resorts Corp., and GT Capital Holdings, Inc.

“[These] are all benefiting from the reopening of the economy,” Ms. Ulang said.

FMIC expects corporate earnings growth to go up to 35% this year from 28% last year. This may be a catalyst to improved investor sentiment.

For more stock picks, Ms. Ulang said issues that give dividends “that are superior than the bench fixed income rate” are preferred such as Globe Telecom, Inc., PLDT, Inc., and Converge ICT Solutions, Inc.

Stocks in the energy sector were also emphasized like AC Energy Corp., Manila Electric Co., and Semirara Mining and Power Corp., or companies with renewable energy projects.

“Inflation plays, we like the mining issues because of the improved regulatory climate and strong demand for electric vehicles, for nickel, and basic metals. Of course, we like the banks,” Ms. Ulang said.

These issues include Philex Mining Corp., Nickel Asia Corp., Semirara Mining, Metropolitan Bank & Trust Co., BDO Unibank, Inc., and the Bank of the Philippine Islands.

FMIC is also optimistic on stocks in the infrastructure and logistics sector as well as real estate investment trust issues such as Metro Pacific Investments Corp., Aboitiz Equity Ventures, Inc., DMCI Holdings, Inc., MREIT, Inc., and Filinvest REIT Corp.

Stocks that are “global trade beneficiaries” and issues riding on the growth of e-commerce are also recommended, like AyalaLand Logistics Holdings Corp. and International Container Terminal Services, Inc.

Access to new investors seen to spur dual listings

INTERNATIONAL advisory law firm Allen & Overy (A&O) is expecting qualified Philippine-listed companies to consider listing in other regional stock markets, such as the Singapore Exchange, for exposure to another set of investors.

“[It] enables the company to have exposure to another set of investors who invest in the Singapore Stock Exchange as not all investors invest in the Philippine Stock Exchange (PSE),” Giancarlo B. Sambalido, a registered foreign lawyer at A&O told BusinessWorld in a recent virtual call.

A&O has rendered its services to firms going public in the Philippines, such as Monde Nissin Corp. for its landmark initial public offering last year.

However, “the attractiveness of a dual listing” may not be for all Philippine companies.

“Only the bigger ones that have a regional, global profile will look to dual list because they want to gain access to these new investors, they want the more enhanced profile of a Singapore listing,” Mr. Sambalido said.

Meanwhile, some of the “hot sectors” expected for the PSE this year are food and consumer, “new economy” or financial technology issues, real estate investment trusts (REIT), and companies in the energy space.

“Especially if it’s a clean energy play,” Mr. Sambalido said. “A lot of investors are looking to invest in clean energy platforms.” — Keren Concepcion G. Valmonte

PATAFA open to reconciliation with pole-vaulter Obiena — PSC

THE Philippine Athletics Track and Field Association (PATAFA) is open to a possible reconciliation with Filipino pole-vault star Ernest John “EJ” Obiena, according to Philippine Sports Commission (PSC) chairman William Ramirez.

“Cong. Rufus (Rodriguez), who chairs PATAFA, told me they are very amenable to a reconciliation,” said Mr. Ramirez during Tuesday’s weekly public service online Philippine Sportswriters Association Forum.

But to fix the discord, Mr. Ramirez stressed the need for Mr. Obiena and PATAFA to sign the document that they are formally agreeing to the mediation.

While both parties are willing, the two factions, however, have not signed anything yet, delaying the process that sought to resolve the mess that had disgraced Philippine sports locally and internationally.

Mr. Ramirez, however, said they are not rushing things since Mr. Obiena might be busy with his plan of going under the knife to repair the small meniscus tear the latter suffered recently.

And the PSC board isn’t thinking twice to lend a helping hand.

“We went beyond compass of the NSA (national sports association) to help EJ (Obiena). The money is ready, we’re just waiting for his call,” said Mr. Ramirez.

The sports-funding agency is also processing the request of Mr. Obiena to release the incentives that he is due for breaking the national and Asian records a year back.

The issue stemmed from the accusation of PATAFA accusing Mr. Obiena of allegedly falsifying liquidations concerning payments to his Ukrainian coach Vitaly Petrov.

Mr. Obiena had repeatedly denied it.

But after more than a month of ugly exchanges in multimedia, Mr. Obiena, PATAFA and even Philippine Olympic Committee President Abraham Tolentino had all relented to a truce.

And there is hope there is light at the end of the tunnel. — Joey Villar

Pfizer CEO says Omicron-targeted vaccine is most likely outcome

Image via US Secretary of Defense/CC BY 2.0/Wikimedia Commons

PFIZER, INC. Chief Executive Albert Bourla on Monday said a redesigned coronavirus disease 2019 (COVID-19) vaccine that specifically targets the Omicron coronavirus variant is likely needed and his company could have one ready to launch by March.  

Mr. Bourla said Pfizer and partner BioNTech SE are working on both an Omicron-targeted vaccine version as well as a shot that would include both the previous vaccine as well as one targeted at the fast-spreading variant.  

“I think it is the most likely scenario,” Mr. Bourla said, speaking at J.P. Morgan’s annual healthcare conference, which is being held virtually this year. “We’re working on higher doses. We’re working different schedules. We’re doing a lot of things right now, as we speak.”  

Mr. Bourla said Pfizer could be ready to file for US regulatory approval for a redesigned vaccine and launch it as soon as March. Mr. Bourla said Pfizer has built up so much manufacturing capacity for the vaccine that it will not be a problem to switch immediately.  

COVID-19 vaccines eventually could be an annual shot for most people, Mr. Bourla said, and some high-risk groups might be eligible to receive the shots more often than that.  

Moderna, Inc. CEO Stephane Bancel said last week that people could need another shot this fall, as the efficacy of boosters is likely to decline over the next few months.  

An Omicron-driven spike in COVID-19 cases has forced some nations to look to another booster dose, but early signs suggest repeat vaccination may be a hard sell.  

Pfizer earlier in the day announced three deals to broaden the use of the messenger RNA technology (mRNA) that its COVID-19 vaccine was based on, including a pact worth as much as $1.35 billion with gene-editing specialist Beam Therapeutics.  

The US drugmaker has been looking to advance the development of mRNA-based vaccines and therapeutics after it led global efforts to develop a COVID-19 shot against the COVID-19 pandemic.  

The company will also collaborate with Codex DNA, Inc. to leverage the biotech’s proprietary technology, which could enable more efficient development of mRNA-based vaccines, therapeutics and other biopharma products.  

Its deal with private biotech Acuitas Therapeutics will focus on the use of the Vancouver-based company’s lipid nanoparticle technology for developing up to 10 vaccines or therapeutics. — Reuters

PSC eyes February resumption of national team training 

RIZAL MEMORIAL SPORTS COMPLEX — WIKIMEDIA.ORG/RAMON F. VELASQUEZ

PHILIPPINE Sports Commission (PSC) chairman William Ramirez is eyeing a February resumption of training by the national team seeing action in this year’s Southeast Asian (SEA) Games and Asian Games (Asiad).

The return to practice was originally scheduled last Monday, but the seemingly unstoppable  coronavirus disease 2019 (COVID-19) surge has resulted to the PSC postponing it to a later date.

“We can’t risk the lives of our athletes and coaches, that’s the reality,” said Mr. Ramirez in Tuesday’s online Philippine Sportswriters Association Forum. “If by February and it reaches its peak to 33,000 to 40,000 cases and goes down, there is a chance we could resume training.

“But, of course, we can only resume if IATF (Inter-Agency Task Force) will allow it. We will pray that COVID-19 cases go down,” he added.

Mr. Ramirez though said there are other sports that have started their bubble training in areas where restrictions are more lenient.

“If it’s a bubble training and its outside Metro Manila and places with higher alert levels and not restrictive health protocol, they can resume training,” he said.

About eight sports venues are located at the PhilSports Complex in Pasig, 10-12 at the Rizal Memorial Sports Complex in Manila and several more at Teacher’s Camp in Baguio.

The Nationals are preparing for the SEA Games slated for May 12-23 in Hanoi, Vietnam and the Asiad set on Sept. 10-25 in Hangzhou, China. — Joey Villar

Three-dimensional proof of our ancient world

National Museum releases an e-book on PHL fossils

THE NATIONAL Museum of the Philippines has released an e-book on Philippine fossils — Fossils: Records of Prehistoric Life in the Philippines — as part of it’s #MuseumFromHome series.

The free publication introduces readers to fossil discoveries in the Philippines as represented by specimens from the National Geological and Paleontological Collections housed at the National Museum of Natural History.

It was written by Maileen P. Rondal, Jaan Ruy Conrad P. Nogot, Abigael L. Castro, Yloisa C. Magtalas, and Jiles Arvin A. Vergara, and edited by Ana Maria Theresa P. Labrador.

“As a young boy, I would often be drawn to fossil exhibitions when visiting natural history museums. This has made me curious about sites I would later visit while touring places — if there are fossils around, how old they might be, and what kind of living beings were around?” National Museum of the Philippine Director-General Jeremy Barns wrote in the publication’s Foreword.

“I have carried this fascination through even as a manager of the National Museum of the Philippines and have been privileged to ensure that fossils found in our country are protected and made accessible by exhibiting and writing about them,” Mr. Barns wrote.

The 86-page publication include information, images, and sketches of fossils of sea and horn snails, ammonites, elephants, fossil plants, and ancient tracks.

Fossils are defined as “the remains of ancient plants and animals preserved in rocks that are at least 10,000 years old.” It comes from the Latin word fossus, which meaning “something dug up,” since fossils are often found buried in rock formations deep in the earth.

The publication also discusses the geological time scale which scientists created to comprehend the complexities and to determine periods in Earth’s history. The scale comes in a color-coded bookmark as a learning aid while reading through each chapter.

“Fossils are three-dimensional proof of our ancient world and helps us imagine what life may have been like before our histories were written,” wrote the book’s editor, Ms. Labrador, who is also the National Museum of the Philippines Deputy Director-General.

The printed version of the book is expected to be released this year.  Download the e-book at https://www.nationalmuseum.gov.ph/publications/.MAPS

Why does Omicron appear to cause less severe disease than previous variants?

As soon as Omicron was first identified in Botswana and South Africa, two key questions arose: whether this new variant was more infectious than earlier ones, and whether it caused more or less severe disease.

It’s clear from how rapidly the variant has spread and how quickly cases have increased that it is more infectious. But the question of whether Omicron has less harmful effects than previous variants — of whether it is less “virulent” — is somewhat more complex.

Early results from South Africa (which are still awaiting review) suggested that patients with Omicron were less likely to be admitted to hospital than before. And research found that even when admitted, people were less likely to require oxygen, need mechanical ventilation, be admitted to intensive care or die.

But South Africa has a young population compared to much of the world. A relative lack of older, more vulnerable people catching the virus may have been masking the variant’s capabilities. Whether Omicron would also cause milder illness in other countries was initially unclear.

However, information accrued over the past month has shown that South Africa’s experience isn’t an anomaly. Data from most European countries, including the UK, supports the suggestion that Omicron is generally causing less severe disease than previous variants.

This is most clearly seen in the recent trajectory of the epidemic in Britain. Analysis by the UK Health Security Agency suggests that Omicron is only about a third as likely to lead to a hospital admission compared to the Delta variant.

Of course, if daily Omicron infections rise to a very high number, as they have, then hospitalizations will also rise. In the final few days of 2021, hospital admissions of COVID-positive people increased quite substantially, but still didn’t surpass levels seen during previous waves. And critically, we haven’t yet seen the number of patients occupying mechanical ventilation beds start to rise.

PARTIAL IMMUNE EVASION
Several different factors might explain why this is happening. First up, there’s immunity. It could be that prior immunity — which thanks to previous infections and vaccination programs is now much more common across many parts of the world than in previous waves — is sufficient to reduce rates of severe disease.

For protection against an initial infection, located in the nose and throat, antibodies against a key part of the coronavirus’s outer structure — its spike protein — appear to play the greatest role. However, these wane over time. Plus, many of the mutations found on Omicron affect the spike protein, and so are likely to impair the antibodies’ ability to bind to the virus, reducing the effectiveness of a vaccine or prior infection at preventing new infections.

But for protection against a more severe infection, which tends to be located in the lungs, other immune responses could be playing a more dominant role, such as killer T cells. These are a type of white blood cell that kills foreign substances as well as the body’s own cells that have been infected with the virus.

And early research, yet to be reviewed by scientists, suggests that Omicron has very few mutations to the parts of the virus that T cells target. This implies that immunity built up in the past that’s potentially more effective against severe disease should still largely be intact.

This could be a powerful explanation as to why Omicron’s virulence appears lower. In the UK, for example, it’s estimated that close to 95% of adults have some form of immunity to the virus through vaccination or infection.

MUTATING TOWARDS MILDNESS
But might Omicron also be intrinsically less virulent than previous variants, even in those with no prior immunity? This is more difficult to be certain of, though there are some signs that suggest it might be.

Firstly, Omicron has several mutations near to a part of its structure called the furin cleavage site, which is thought to play a role in virulence. In laboratory experiments where the virus’s furin cleavage site was deleted, the virus showed reduced growth in human respiratory cells and caused less severe disease in laboratory animals. It’s plausible that the mutations around the furin cleavage site could explain some of the reduced virulence of Omicron.

Several groups have also studied the ability of Omicron (or a similar pseudovirus) to grow in tissue cells. These studies — which are also awaiting review — report that the virus grows less well in lung tissue but better in the tissue of the upper airway compared to previous variants.

Enhanced growth in the upper airway could lead to more virus being shed through the nose and mouth, which might help explain in part why Omicron is more infectious. And given that infection of the lungs, rather than the upper respiratory tract, is what’s associated with more severe disease, the reduced ability of the variant to grow in the lungs could also be an important factor in explaining reduced virulence.

Overall, whatever the mechanism, the evidence that Omicron is causing less severe disease than previous variants is now adding up. But this doesn’t mean we should see it as less of a threat. Ultimately, the impact Omicron will have on public health will depend on how many people become infected. Because it’s much more infectious, we might still end up with many people getting severely ill, even if the proportion of infected people getting severely ill is lower. The need to try and contain the spread of the virus remains, at least for the time being.

 

Paul Hunter is professor of Medicine at the University of East Anglia in England. He consults for the World Health Organization (WHO) and receives funding from the UK National Institute for Health Research, the WHO, and the European Regional Development Fund.