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‘Surprise’ urban Malaysia floods drive pleas for climate action

A man and his child stand in flood water in Shah Alam, Selangor state, Malaysia, December 19, 2021. — REUTERS/Rozanna Latiff

KUALA LUMPUR — The damaged furniture and mud-caked walls left by floodwaters have now been replaced or cleaned in Elizabeth Chong’s family home, but lost forever are old photos and documents that gave a precious glimpse into her ancestors’ lives. 

On the street in Malaysia’s capital Kuala Lumpur where Chong’s family have lived for almost a century residents have coped with regular flooding for decades — but nothing prepared them for the devastation caused by rising waters late last year. 

Ms. Chong, who lives in a two-storey house with her disabled aunt and retired mother, was among more than 120,000 people displaced by heavy rains and severe flooding in mid-December and early January across Malaysia. 

“We knew that it was raining constantly and we expected a flood — but not to that extent,” the 22-year-old told the Thomson Reuters Foundation. 

“The doors burst open. Water came in like crazy. All of a sudden it was chest high,” said Ms. Chong, an administrator for a pharmaceutical company and a part-time student. 

Disasters in 2021 from extreme weather and natural phenomena such as earthquakes resulted in a global economic loss of $270 billion, according to a March report by the Swiss Re Institute. 

Floods alone accounted for 31% of those losses, it noted. 

Like many Southeast Asian nations, Malaysia suffers regular flooding during its annual monsoon season but such widespread destruction rarely occurs in the richest states, including the capital and neighboring Selangor. 

Urban areas across the region — already struggling to cope with booming populations, rapid urbanization and crumbling infrastructure — now face heightened threats from climate change-driven storms, heatwaves, floods, and forest fires. 

Malaysia’s recent floods — some in areas once considered immune to such damage — caused nearly $1.5 billion in losses and were described by government officials as a “once-every-100-years” weather event. 

But victims say the country’s response to the floods was often slow and inadequate, and green groups are now calling on the government to introduce laws to cut climate changing emissions and boost emergency response and adaptation efforts. 

“Floods occur every year somewhere, at some time in the country,” said Salleh Mohd Nor, a former president and senior advisor at the Malaysian Nature Society. 

“To say that this (flood) is one-in-100-years is something I doubt … with climate change the rains will be more frequent and torrential,” he added. 

WAITING FOR RESCUE
The last time deep floodwaters entered Ms. Chong’s terraced house — which sits near a river and in the shadow of a huge mall and fancy hotels — was in 2000. One of her earliest memories is of falling into floodwaters as an infant. 

Renovations to the house over the years have included adding an additional floor, raising the structure by 2 feet (0.6 meters), and installing a flood barrier. 

Authorities also completed construction of a key drainage and road tunnel in 2007, to guard against flash floods in the capital and help ease traffic congestion. 

But after more than three days of near-constant rain in late December, floodwaters rose in about three hours from a trickle in Ms. Chong’s home to touching the ceiling of the ground floor. 

She and her family were forced to seek safety on the dry upper floor where, in darkness after the electricity was cut, she began frantically calling emergency services on her mobile phone. Nobody answered. 

As trapped neighbors shouted questions and instructions to each other through windows, Ms. Chong phoned her local fire station and was told to call the national government helpline. 

A quick Google search showed that it only operated from 9 a.m. to 6 p.m., she said. 

Fire crews eventually used a boat to rescue Ms. Chong’s family from the balcony, dropping them off on higher ground — and in the rain — without additional help, she added. 

They temporarily moved in with family that lived elsewhere in the city, and the next day she returned home with her mother to salvage some belongings. 

“This house had a lot of photos,” Ms. Chong said. “Historical, valued things from my grandparent’s time were all ruined.” 

VANISHED FORESTS
Malaysia was once entirely covered in trees but nearly half have now vanished, according to green group WWF. 

The country has lost nearly a fifth of its primary forest since 2002, though deforestation rates have fallen in recent years, according to monitoring service Global Forest Watch (GFW). 

Analysts say forest losses may be contributing to the worsening floods, with many of the hardest-hit states also showing the highest deforestation rates, according to GFW data. 

As news reports emerged of rivers and flooded areas awash with logs, opposition politicians called on the government of Pahang state, east of Kuala Lumpur, to check on illegal and uncontrolled logging. 

Damien Thanam Divean, vice president of non-governmental organization PEKA Malaysia, said clear-cutting of forests, to plant crops such as palm oil and durian fruit, had reduced the ability of land to absorb water, worsening floods. 

He called for a change in the national constitution to put forest management under federal control, with funds allocated to states to promote conservation efforts. 

Malaysia’s Environment Ministry and Prime Minister’s Office did not respond to a request for comment. 

Still, it is difficult to prove that deforestation upstream caused any specific flooding event, said John-Rob Pool, the implementation manager for Cities4Forests, led by the World Resources Institute, a US-based think-tank. 

During heavy rains, however, forests and fallen vegetation slow runoff, allowing more water to enter the soil and reducing the amount flowing downstream. 

That means, “restoring forests is an absolute no-regret strategy” whether for biodiversity protection or lowering flood risk, Mr. Pool said. 

Typically, seasonal floods happen more along the eastern coast of the Malaysian peninsula, said Renard Siew, a climate change advisor at think-tank the Centre for Governance and Political Studies — so the floods in December came as a shock to many urban residents. 

They “never thought the time would come when they would actually have to evacuate from their homes for safety,” he said. “That took them by surprise.” 

Climate change played a role in the severity of the rains and floods, he said, but other factors also contributed to the damage, from garbage-clogged city drains to construction on formerly green areas. 

He urged Malaysia’s government to better protect forests and mangroves, plant more urban trees and introduce a climate change act to help ministries and authorities work better together. 

“We saw in December that things were not as coordinated as they should be,” he said. 

SLOW RECOVERY
Kuala Lumpur resident Ms. Chong’s salary barely covers the household bills and her flood-hit family received no clean-up or financial help from the federal government, she said. 

But local charities, non-government organizations and others stepped in to help — including Ms. Chong’s employer which set up a fund to replace damaged items while friends chipped in with plates, cups and a rice cooker. 

The house is now clean of mud but still needs major repairs on the electrics and toilets — and Ms. Chong’s wheelchair-bound aunt now lives in temporary accommodation provided by a non-government organization. 

Ms. Chong blames the loss of trees — and a lack of investment in flood prevention infrastructure — for her family’s losses. 

“One of the reasons why it floods so much is because they cut down too many trees or burn down trees to make way for developments and palm oil plantations,” she said. — Michael Taylor/Thomson Reuters Foundation

AG&P: Helping build stronger Philippine industry

AG&P Industrial Division, a manufacturing, Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) and Operations & Maintenance (O&M) leader, is pursuing projects that would help the Philippines bounce back strongly from the pandemic, usher in a greener economy and help fortify energy security in the country.

On the other hand, AG&P Energy Division develops owns and operates the downstream LNG / Natural Gas (NG) platform, including LNG regasification terminals, LNG-to-power integrated solutions, City Gas Distribution (CGD) and LNG bunkering which allows it to provide clean energy directly to its clientele.

Combined, AG&P is building infrastructure for sustainable growth of the Philippine economy and beyond.

Leading the industrial growth

In recent years, AG&P has been developing domestic infrastructure that will strengthen the industrial capability of the country as well as provide large-scale employment. “AG&P has a state-of-the-art manufacturing facility in the Philippines, which is a mini-city by itself wherein modules of various sizes (some thousands of tons) are ready for assembly at their clients’ project site. In the last three years, we have employed 8,000 people. Prior, we have sent over 12,000 people overseas and hired 11,000 domestically at our facility and are one of the largest employers in Batangas,” said Mr. Alex Gamboa, President, AG&P Industrial.

AG&P completed the expansion of the fully-integrated petrochemical complex of JG Summit, building the first fully-integrated petrochemical plant in the country; constructed major structures and mechanical components at Masinloc power plant; Petron lube blending plant; and the Shell North Mindanao import facility; the upgrade of the smelting facility of Glencore; and the modification of the Shell Malampaya offshore gas platform.

In addition, AG&P has delivered 30 modules to date from the Philippines to Thailand for its Sriracha Refinery under the Thai Oil Clean Fuel Project. Upon completion of this project, Sriracha’s refining capacity for high-value fuel products will increase from 275,000 to 400,000 barrels per day, while ensuring compliance to the new global fuel quality and emission standards.

AG&P has recently been engaged by Cemex Holding Philippines Inc.’s subsidiary – Solid Cement Corporation for its Solid K4 Expansion Project. A $235-million initiative, it involves the construction of a new integrated production line at Solid Cement’s plant in Antipolo, Rizal to increase annual capacity of blended cement by 1.5 million tons to 3.4 million tons. The target completion is by first quarter of 2024.

“We share CEMEX’s view on the growth of the construction industry and future need for increased cement production capacity to help develop and upgrade the country’s infrastructure for the Philippine economy to expand further,” said Mr. Gamboa.

Leading the energy transition

AG&P is proud to lead the global energy transition to cleaner fuels through their subsidiary GAS Entec, an energy advisory and technology firm, headquartered in Singapore with engineering offices in South Korea. The firm designs and builds cutting-edge floating and onshore LNG infrastructure powered by its proprietary plug-and-play products and advanced LNG technical solutions – bringing innovation to downstream LNG infrastructure and enabling the introduction and accelerated adoption of LNG to gas-starved demand centers. In the Philippines, AG&P is building the first Philippines LNG (PHLNG) Import Terminal of the country.

The Philippines LNG (PHLNG) Import Terminal in Ilijan, Batangas.

AG&P is spending PHP22 billion to complete the country’s first LNG import terminal, called PHLNG, within the second half of 2022 in Batangas. The PHLNG Import Terminal will initially have an annual capacity of 3 million tons of LNG.

“The Philippines LNG (PHLNG) Import Terminal in Batangas represents our contribution to enhancing energy security for the Philippines, specifically the Luzon grid,” said Mr. Gamboa.

He said the PHLNG is also envisaged to help Filipinos gain more experience and skills in the LNG industry that would help them get employed overseas, particularly in AG&P projects abroad. He said plans are afoot to link with universities and government agencies to realize this goal.

According to Mr. Gamboa, AG&P is also bidding for several projects in the energy transition and renewable energy space that when combined will generate several thousands of Megawatts needed in the future to sustain the growth of the economy; some light industry projects in the food and electronics sector; the manufacture of construction materials to reduce dependence on imports; and projects overseas that will increase production at its manufacturing facilities.

“We believe in the potential of the Philippines and the Filipinos. We are definitely interested in projects in the country that will leverage the experience and expertise we have gained abroad in building industrial infrastructure over the decades. We are also undertaking projects overseas that will use our facilities here, provide jobs for Filipinos and help increase dollar reserves for the country,” he said.

 


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China COVID hard line eats into everything from Teslas to tacos

REUTERS

SHANGHAI — When Tesla’s Shanghai plant and other auto factories were shut over the last two months by emergency measures to control China’s biggest coronavirus disease 2019 (COVID-19) outbreak, the burning question was how quickly they could restart to meet surging demand. 

But with the Shanghai lockdown grinding into its fourth week, and similar measures imposed in dozens of smaller cities, the world’s largest boom market for electric cars has gone bust. 

Other companies from luxury goods makers to fast-food restaurants have also offered a first read on the lost sales and shaken confidence of recent weeks, even as Beijing rolls out measures to help COVID-hit industries and stimulate demand. 

Joey Wat, chief executive officer of Yum China, which owns KFC and Taco Bell, said in a letter to investors that April sales had been “significantly impacted” by COVID controls. In response, the company simplified its menu, streamlined staffing and promoted bulk orders for locked-down communities, she said. 

The pressing question now is: how and when will Chinese consumers start buying everything from Teslas to tacos again? 

In China’s once-hot electric vehicle (EV) market, the recent turmoil is a stark example of a one-two economic punch, first to supply and then to demand, from Beijing’s hardline implementation of COVID controls across the world’s second-largest economy. 

Before Shanghai was locked down in early April to contain a COVID-19 outbreak, sales of EVs had been booming. Tesla’s sales in China had jumped 56% in the first quarter, while sales for EVs from its larger rival in China, BYD, had quintupled. Then came the lockdowns. 

Showrooms, stores and malls in Shanghai were shut and its 25 million residents were unable to shop online for much beyond food and daily necessities due to delivery bottlenecks. Analysts at Nomura estimated in mid-April that 45 cities in China, representing 40% of its GDP, were under full or partial lockdowns, with the economy at a growing risk of recession. 

The China Passenger Car Association estimated retail deliveries of passenger cars in China were 39% lower in the first three weeks of April from a year earlier. 

COVID control measures cut into shipments, car dealers held back from promoting new models, and sales tumbled in China’s richest markets of Shanghai and Guangdong, the association said. 

One dealer of a premium German car brand in Jiangsu province, which borders Shanghai, told Reuters sales plunged by one-third to half in April, citing lockdowns and trucking bottlenecks that made it difficult to deliver orders. 

He was even more worried about the impact on consumer spending power, he said, declining to give his name as he was not permitted to speak to the media. 

“It could be worse than the first wave of COVID in 2020, when the economic recovery was quick and strong. Nowadays there are more uncertainties in the economy, and the stock and property markets are not doing well,” he said. 

DOWNWARD SPIRAL 

“Much will depend on how fast these restrictions can be lifted but the coming weeks may be difficult,” Helen de Tissot, chief financial officer at French spirits maker Pernod Ricard, told Reuters on Thursday. 

Kering, which owns luxury brands including Gucci and Saint Laurent, said a “significant chunk” of its stores had been shuttered in April. 

“It’s very difficult to predict what will happen after the lockdown,” said Jean-Marc Duplaix, Kering’s chief financial officer. 

Apple also warned at its latest results over COVID-hit demand in China. 

City authorities from Beijing to Shenzhen are trying to stimulate some demand by giving out millions of dollars worth of shopping vouchers to encourage residents to spend. 

On Friday, Guangdong, a manufacturing powerhouse with an economy larger than South Korea’s, rolled out its own incentives to try to restart sales of EVs and plug-in hybrids. 

These include subsidies of up to 8,000 yuan ($1,200) for a select range of what China classes as “new energy vehicles”, including from Volkswagen and BYD. Tesla, second in EV sales in China, was excluded from the subsidy program. 

The US automaker did not respond to a request for comment. 

Chongqing, another major auto manufacturing hub, in March said it would offer cash of up to 2,000 yuan ($300) for shoppers who exchange old cars for new models and set aside another $3 million for other measures to spur sales. 

While noting such measures, Credit Suisse analysts still said they believe COVID control measures have put both online and offline consumption on a downward spiral. 

“We see the consumer sector as being at major risk if the prolonged pandemic and further tightening continue across China,” they said in an April 19 research note. — Reuters

Summit Natural Drinking Water fuels Filipino athletes’ #ThirstforGold in the 31st SEAGAMES

Empowering our heroes Hidilyn Diaz, EJ Obiena and Filipinas (Philippine Women’s National Football Team) with the right hydration and right minerals in their journey to summit!

Summit Natural Drinking Water showcases, once again, its unwavering commitment to supporting Filipino athletes thrive, this time in their bid to bring honor to the country in the 31st Hanoi Southeast Asian (SEA) Games this May 12 to 23, 2022.

As the official bottled water partner of the Philippine Olympic Committee, Summit is one with our athletes in their journey to aspire, perspire, and inspire fellow Filipinos. The Philippines’ first Olympic gold medalist Hidilyn Diaz, Asian pole vault record-holder EJ Obiena, and now, Filipinas, the Philippine National Women’s Football Team are all set to have their hydration levels covered by Summit with the right minerals, allowing them to remain focused on their goals and deliver at peak performance.

Even before Hidilyn and EJ entered the pantheon of Filipino sports icons, Summit has been there to support their respective journeys.

HIDILYN’S JOURNEY TO SUMMIT

Hidilyn Diaz has been making a name for herself since 2008, when she was selected as a wildcard entry for the Beijing Games, becoming the first-ever Filipina to compete in weightlifting. 2016, the year when Hidilyn Diaz, ended the country’s 20-year Olympic medal drought by winning silver at the women’s 53-kg category in weightlifting. Summit is honored to have witnessed that win at the Rio Olympics. To show their love and support for Diaz, they officially made her one of their ambassadors in the year 2018. The goal is not only for Hidilyn to promote the brand but also to back her up in terms of training and hydration as Summit believes in her persistence, motivation, and capacity in achieving a Gold. True enough, in 2019, Diaz won her first SEA Games Gold medal after topping the 55-kg division. With a committed sponsor by her side, Hidilyn powered through challenges en route to her historic win in the Tokyo Games that ended the country’s 93-year hunt for an Olympic gold medal. With back-to-back milestones from various competitions, she proved that she has always had a #ThirstforGold.

To commemorate Hidilyn’s success story, Summit Natural Drinking Water is launching Summit Labels featuring Hidilyn Diaz in 350ml, 500ml and 1L formats and Sports Bottles in 500ml format, which you can now get in leading stores nationwide.

EJ’S JOURNEY TO SUMMIT

Meanwhile, EJ Obiena joined Team Summit after rising in the pole-vaulting scene here and abroad. He most memorably competed in the Tokyo Olympics against the best, proving that one of the sport’s brightest stars is a Filipino.

The “Golden Boy” has been jumping since he was six years old. Since then, he has always remained active, joining the track teams throughout his years in school, from elementary to college, before competing internationally, starting at the 2019 SEA Games where he bagged the gold medal after clearing 5.45 meters on the bar. A year later he stands as the first Filipino athlete to qualify for Tokyo 2020, capping off as the fifth overall in his group during the qualifiers and 11th overall as he made the cut. Currently, EJ is a world record holder with 5.93m as his best performance and recently he has been winning gold in competitions across the globe.

EJ is also set to be carrying the Philippine flag in the opening ceremony of the upcoming SEA Games, making his participation even more remarkable. With EJ as the official flag bearer, he is not only representing Filipino athletes but giving pride and joy to all Filipinos around the world.

The two Filipino Olympians make room as Summit welcomes to its growing family the Philippine National Women’s Football Team, now known as Filipinas. The young, history-making squad secured a spot in the next year’s FIFA World Cup, becoming the first Philippine team to qualify for the grandest stage of the world’s biggest sport.

FILIPINAS’ JOURNEY TO SUMMIT

The Philippine Women’s National Football Team, also known as the “Filipinas” continue to break barriers as they continue to prove their #ThirstForGold. The Filipinas made a historic feat in the AFC Women’s Asian Cup in India earlier this year by reaching the semifinals and qualifying for the FIFA Women’s World Cup for the first time ever. Now they are embarking on the journey towards the 31st SEA Games by making sure that they are well prepared and well trained with the help of getting support and the right minerals from Summit.

With the support of Summit Natural Drinking Water, the Filipinas look to carry the momentum from their World Cup qualification onto the SEA Games next month. Meanwhile, Hidilyn and EJ are reigning gold medalists at the Games and are thirsty for more.

Show your support as our athletes #ThirstForGold at the SEA Games! Every purchase of Summit Natural Drinking Water bottle contributes to the training of our athletes taking them one step closer to their goals.

This year, Summit Natural Drinking water also partners with Liv3ly in promoting an active lifestyle and supporting Filipinos as they #ThirstForMore.

Liv3ly is a social fitness app with the goal of motivating users to move through engaging, experiences, gamification, and rewards. With the app, users can take on running challenges, track records, and compete with other users.

Download the Liv3ly app now in Appstore and Google Play to win exciting prizes from Summit! Stay tuned for Summit #ThirstForMore virtual run for more surprises!

 


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Hope fizzles for Japan’s ‘revenge spending’ splurge as inflation looms

REUTERS

TOKYO — Japanese mother of three Maiko Takahashi was never one to pinch pennies or accept hand-me-downs for her children even though circumstances for her single-income family have always been fairly modest.

But times have changed. Nowadays, she has no trouble with used clothes and her pursuit of bargains and scrimping on the most trifling costs borders on the obsessive.

“I’ve started to pay close attention to tips on TV shows, like minimizing the number of times you open the fridge to save electricity,” said Ms. Takahashi, whose family of five lives in suburbs north of Tokyo.

“We’ve started to feel the pinch going about things the usual way so I’ve made adjustments.”

Ms. Takahashi’s behavior is mirrored by a growing number of consumers and underlines a worrying trend for Japan.

After lifting two years of on-and-off coronavirus curbs in March, the government was counting on what’s known as “revenge spending”, pent-up demand triggering a splurge that boosts consumption and a moribund economy, as has been seen in the United States, China and some other major economies.

But with energy, food and other living costs soaring — exacerbated in recent months by a sharp decline in the yen and the war in Ukraine — those hopes are fading fast.

Facing the prospect of struggling with rising prices, Japan’s famously thrifty consumers are tightening their belts even as they sit on the remains of an estimated 50 trillion yen ($383 billion) — equivalent to 9% of the economy — in “forced savings”, as the Bank of Japan calls it, accrued during the pandemic.

Some bigger companies have answered a government call to raise wages but the gains of some 2% will be swallowed up by higher prices of everything from flour, to diapers and beer, economists say.

In March, electricity prices in resources-poor Japan jumped 22% from the previous year — the most in more than four decades.

The government recently upgraded its assessment of the economy for the first time in four months, citing an expected recovery in spending, but added a caveat that the outlook was clouded.

“The chance of a ‘revenge spending’ burst is becoming smaller than we had expected,” a government official said in unusually candid remarks, noting that prospects were especially uncertain beyond the summer.

FINAL FEAST

With more than 90% of consumers saying in the latest government survey that they expected everyday goods to become more expensive over the next 12 months, economists say it is no surprise to see behavior like Ms. Takahashi’s.

In addition to accepting used uniforms for her son entering kindergarten, and venturing further in search of discounts, the stay-at-home-mum said she has switched to lower-cost private brands (PB) for mayonnaise, ketchup and other food.

She’s not alone. The share of so-called PB items for mayonnaise purchases nationwide rose to 22% in March from 18% a year earlier, according to market research firm Intage Inc. Supermarket giant Aeon Co. saw PB food sales jump 15% in the six months to February.

The “Golden Week” holiday, which began on Friday, is the first in three years without coronavirus disease 2019 (COVID-19) restrictions, and the economy should see a dramatic improvement in spending but that is likely to be the high point for consumption this year, said Daiwa Securities senior economist Toru Suehiro.

“The full-fledged impact of rising costs will emerge in the July–September quarter and later, so the Golden Week will probably be the last feast of the year,” he said.

The number of holiday travelers is expected to grow about 70% from last year, but still a third short of pre-pandemic levels, according to JTB Corp., Japan’s biggest travel agency.

The yen’s fall to two-decade lows would normally be a boon for in-bound travelers, but Japan, fearing COVID, has kept its borders closed to tourists. In 2019, almost 32 million foreign tourists contributed to the economy.

Meanwhile, the weak yen has caused pain for many companies by increasing input costs, making them just as cautious as consumers — and reluctant to raise wages.

“Prices keep rising and rising for items we can’t live without, while salaries are flat,” Ms. Takahashi said. “I’m constantly racking my brains over what I can skimp on next.” ($1 = 130.6400 yen) — Kantaro Komiya and Kentaro Sugiyama/Reuters

Russia’s Ukrainian quagmire providing tough lessons for China

REUTERS

HONG KONG/BEIJING — From countering a Western “information war” during a Taiwan conflict to using “shock and awe” to swiftly subdue the island’s forces, Chinese strategists are soaking up lessons from Russia’s Ukrainian quagmire, diplomats, scholars and analysts say. 

Chinese military experts are discussing the conflict in private chat groups, offering their takes on Western involvement in Ukraine and Russia’s perceived failings, say two scholars and four Asian and Western diplomats who are in touch with Chinese strategists. 

Although their conclusions have yet to surface in official military journals or state media, Russia’s failure to quickly crush the Ukrainian military is a key topic — as are fears about how well China’s untested forces would perform. 

“Many Chinese experts are monitoring this war as if they are imagining how this would unfold if it happened between China and the West,” said Beijing-based security scholar Zhao Tong of the Carnegie Endowment for International Peace. 

Russia’s approach in the early stages of the war did not subdue Ukrainian forces, which emboldened the international community to intervene with intelligence sharing, military equipment and the economic isolation of Russia. 

“China probably should think about conducting a much stronger and much more comprehensive operation at the very beginning to shock and awe the Taiwanese forces to secure a major advantage,” Mr. Zhao said, referring to observations from Chinese strategists. 

They believe securing that advantage would “deter enemy forces from being willing to intervene,” he said. 

Singapore-based scholar Collin Koh said such an approach would create its own problems for China’s People’s Liberation Army. 

“If you are going to ‘shock and awe’ Taiwan with overwhelming force in the initial stages, there might be a lot of civilian casualties,” said Mr. Koh, of the S. Rajaratnam School of International Studies. That would make occupation difficult and harden international opposition. 

“The Chinese can’t have any illusions now that they will be welcomed as liberators in Taiwan and given supplies and assistance,” he said. 

Taiwan also has greater missile capabilities than Ukraine, allowing for pre-emptive strikes on a Chinese build-up or attacks on Chinese facilities after an invasion. 

Neither China’s defense ministry nor China’s Taiwan Affairs Office immediately responded to requests for comment. 

Russian forces invaded eastern Ukraine starting on Feb. 24, reducing towns and cities to rubble amid stiff resistance, losing thousands of troops as well as tanks, helicopters and aircraft. British officials estimated this week that 15,000 Russian troops have died; other sources suggest a higher number. 

More than 5 million people have fled after what Russia describes as a “special operation” to disarm Ukraine and protect it from fascists. Ukraine and Western governments say this a false pretext for an unprovoked war of aggression by President Vladimir Putin. 

INFORMATION WAR 

Chinese strategists also worry about how Russia is contending with indirect Western military assistance, a factor China would also face in a Taiwan scenario, say two scholars and four diplomats. 

Chinese experts are privately arguing about the need for Beijing to better compete in the so-called information war, which has complicated Russia’s position on the battlefield, Mr. Zhao said. 

Besides isolating Russia economically, Western diplomatic efforts — and reporting on atrocities in the war zone — have made it easier to provide aid for Ukraine and harder for Russia to find outside support. 

Mr. Zhao said that to Chinese strategists, one of the most important parts of the current conflict was how Western nations “are able to manipulate, from their perspective, international opinion and decisively change the international response to the war.” 

Some Chinese strategists believe that the control of information has created a much worse impression of Russian performance than is warranted. 

“There are a lot of discussions about how China needs to pay great attention to this information domain,” Mr. Zhao said. 

LOGISTICAL CHALLENGES 

Some analysts note that the Ukrainian campaign was under way long before Russian forces invaded in late February, with months of build-up on the Russian side of the border. Those efforts were easily tracked by private sector open-source intelligence firms and repeatedly highlighted by US and other governments. 

“Taiwan would present a far greater logistical challenge than Ukraine, and to ready an invasion force on that scale undetected would be incredibly difficult,” said Alexander Neill, who runs a strategic consultancy in Singapore. 

China’s military leaders also have for decades looked to Moscow for not just weapons but also structural and command doctrine. 

Russian and Chinese forces have staged increasingly intensive joint exercises in recent years, including large-scale combined arms operations in Russia in September 2020. 

Strategic assumptions from this collaboration, however, are being tested. In 2012 the PLA adopted units similar to Russian Battalion Tactical Groups (BTG) — supposedly swift, nimble and self-supporting units. But Russian BTGs have become bogged down in Ukraine and proven vulnerable to attack. 

Russia has also struggled to coordinate the involvement of several military districts in the Ukraine war. Chinese analysts worry a Chinese invasion across the Taiwan Strait — widely seen as a far greater military challenge — would face similar problems, as it requires smooth cooperation across its recently formed Southern, Eastern and Northern Theater Commands. 

Russia’s forces in Ukraine have had command breakdowns and low morale. Analysts say it’s unclear how Chinese troops — untested since they invaded northern Vietnam in 1979 — would perform in a modern conflict. 

“We’ve seen signs of alarming indiscipline from Russian troops, which is a reminder that there is so much we don’t know about how Chinese troops would perform under the pressures of war,” Mr. Neill said. “For all the political indoctrination, we just don’t know how resilient they would be.” — Greg Torode, Martin Quin Pollard and Yew Lun Tian/Reuters

Bored Ape NFT company raises around $285M of crypto in virtual land sale

SCREENSHOT VIA OPENSEA/BORED APE YACHT CLUB

LONDON — The company behind the “Bored Ape” series of non-fungible tokens (NFTs) has raised around $285 million worth of cryptocurrency by selling tokens which represent land in a virtual world game it says it is building. 

Last year, US start-up Yuga Labs created the Bored Ape Yacht Club NFTs, blockchain-based tokens representing a set of 10,000 computer-generated cartoon apes. 

As NFTs — crypto assets that represent digital files such as images, video, or items in an online game — exploded in popularity, Bored Ape prices surged to fetch hundreds of thousands of dollars each. 

They became one of the most prominent NFT brands, with Apes sold at top auction houses and owned by celebrities including Paris Hilton and Madonna. 

Now, Yuga Labs — which raised $450 million in March in a funding round led by Andreessen Horowitz — has set its sights on the so-called “metaverse.” 

In an online sale on April 30, Yuga Labs sold NFTs called “Otherdeeds,” which it said could be exchanged as plots of virtual land in a future Bored Ape-themed online environment called “Otherside.” 

The “Otherdeeds” could only be bought using the project’s associated cryptocurrency, called ApeCoin, which launched in March. 

There were 55,000 Otherdeeds for sale, priced at 305 ApeCoin each, and the company wrote on Twitter that these had sold out. 

This means the sale raked in 16,775,000 ApeCoin, worth around $285 million as of Sunday, according to Reuters calculations based on the price of ApeCoin on cryptocurrency exchange Coinbase at 1210 GMT. 

It was not clear how the funds would be distributed, although the company said the ApeCoin would be “locked up” for one year. 

The sale indicates the continued high demand for speculative, high-risk crypto assets related to online virtual worlds. NFTs are largely unregulated, and reports of scams, fakes, and market manipulation are common. 

While many are baffled by the idea of paying real money for land which does not physically exist, some virtual land NFTs have already fetched millions of dollars. 

The Otherside metaverse will be a multiplayer gaming environment, according to its website, which says it is currently under development. 

Yuga Labs declined to say how many people were working on building Otherside or when it would be launched. 

Yuga Labs’ Otherdeeds sale comes shortly after the Bored Ape Yacht Club official Instagram account was hacked and a phishing link posted, allowing scammers to steal victims’ NFTs. — Elizabeth Howcroft/Reuters

[B-SIDE Podcast] Russia, Ukraine, and the Philippines (Part 1)

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Government officials have assured Filipinos that the impact of the Russia-Ukraine war will be minimal given the Philippines’ limited trade and banking exposure with either country. Remittances from the conflict zones are also small compared to inflows from the rest of Europe and the world.

Still, the fact remains that Russia is a major exporter of oil and metals, while Ukraine is among the biggest sources of wheat.

Amid faster inflation, jeepney drivers have called for transport fare hikes; labor groups, for higher wages.

In this B-Side episode, Chester B. Cabalza, International Development and Security Cooperation president and founder, tells BusinessWorld reporter Luz Wendy T. Noble why Filipinos should care about what happens to Russia and Ukraine from three angles: energy, warfare, and diplomatic impact.

He compares and contrasts the hybrid war in Europe to what’s happening in the Asia-Pacific, with China flexing its muscles. Closer to home, Mr. Cabalza, who is also a security anthropologist at the University of the Philippines, draws parallels between the hybrid war waged by Russian President Vladimir Putin and the conflict in Marawi.

TAKEAWAYS

The geopolitical landscape is shifting and the Russia-Ukraine war raises the question: which nation will remain a superpower?

“We will see a lot of hot wars — major powers will have to compete who among them will be the major superpower,” Mr. Cabalza said. How long the US keeps its position as the world’s strongest economy and military is in question.

He noted that the Philippines, under the administration of President Rodrigo R. Duterte, boosted ties with Russia “due to idolatry and fascination” for President Vladimir Putin.

The war is a playbook for China’s next move.

China, the second biggest economy, is perceived to have a strong military technology. But the country’s practical experience in terms of tactics has never been tested as it has not played a major role in previous wars, said Mr. Cabalza.

The Philippine military could learn a thing or two from the conflict.

“Even if you have a vision of reviving your country as a superpower, sometimes, strategy is a matter of understanding also. We have to question how come Putin so far has underestimated … Ukraine?” said Mr. Cabalza, who drew parallels between the Russia-Ukraine conflict and the siege of Marawi City in 2017.

Furthermore, the military could look at how the war unfolds to seek insights that apply to the territorial dispute in the West Philippine Sea.

The war is a reminder to elect sensible, humane, and decisive leaders.

Mr. Cabalza said the best leader to choose in this coming election is someone who will prioritize the national interest of the Philippines, pursue multilateralism, and abide by international cooperation.

The war, he added, has exposed how a leader’s temperament can affect global geopolitics.

“They [leaders] have frailties, weaknesses, and sometimes they go crazy with their decisions. And when they have wild decisions, we get affected,” Mr. Cabalza said.

Recorded remotely on April 27, 2022. Produced by Earl R. Lagundino and Sam L. Marcelo.

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Security Bank strengthens its BetterBanking commitment to stakeholders, holds 2022 Economic Forum

Key experts in global and local economics and political analysis shared their outlook for 2022 in the Security Bank Economic Forum, which was moderated by the Bank’s chief economist, Robert Dan Roces.

As part of its commitment to provide stakeholders with avenues for discourse to enable decision-making, Security Bank held its 2022 Economic Forum on April 28, 2022. Key economists and political analysis experts discussed the effects of the current political landscape and ongoing conflicts on the country’s economy.

Titled “Economic trends, the political environment, and the impact on the business community,” the event was headlined by Akihiko Sato, Chief Economist & Managing Director and Head of Economic Research office at MUFG Bank Ltd; Dr. Cielito Habito, Chair, Brain Trust, Inc. and a professor at Ateneo de Manila University; and Prof. Victor Andres Manhit, Founder and Managing Director of the Stratbase Group.

A look at global trends

Akihiko Sato discussed the impact of the Russia-Ukraine war and COVID-19 lockdowns in China on the global economy, the ASEAN region, and the Philippines.

“Inflation rates across many countries will continue to be elevated, thus prompting a cycle of monetary tightening by central banks. Constraints related to supply chains will also worsen in light of sanctions related to the Russia-Ukraine conflict and the lockdowns China instituted to prevent the spread of COVID-19,” he said.

He also presented data on how the war between the two neighboring countries has affected not only the economy, but also the world’s global supply chain, which has heavily contributed to the increase of oil prices and other commodities.

“One factor that contributes highly to this disruption is China’s zero COVID policy, the lockdowns have contributed greatly to port congestion and production delays, if this continues, we will also see continued disruption on the global supply chain,” said Mr. Sato.

“Many ports in the east coast of China rank in [the] top 10 globally, so the disruption of the Chinese economy directly affects the global economy through logistics disruptions. And as for the Ukraine conflict, there are many commodities where Russia has [a] big presence and the war and economic sanctions will no doubt affect global supply chains [negatively].”

Additionally, Mr. Sato noted that in the coming years, the changes to social structures created by the pandemic and the new geopolitical realities in Asia and Europe could become dominant trends.

From global to local

Meanwhile, Dr. Cielito Habito shared his outlook on the Philippine economy amidst the fallouts from the COVID-19 aftermath and the Russia-Ukraine conflict.

“We are seeing a shift in where workers are looking for jobs as there has been an increase in workers in the farming, fishing, and trading sectors and an exodus from industry and Feed the Future sectors,” said Dr. Habito

He adds,“There has also been an increase in the size of the informal sector — which could lead to lower tax revenues for the government — and more people are opting to work at part-time jobs and fewer are working in full-time jobs.”

Despite this, Dr. Habito noted two positive streams that could help bring the economy back on its feet: agricultural and digital/technology sectors. “Agricultural production has been prevalent across all regions, and the sector has been the biggest provider of jobs for Filipinos. Meanwhile, the digital economy has introduced disruption in the form of improvements in operational processes. We have also seen new products in the market, such as those offered by financial technological companies, which benefit consumers,” said Dr. Habito.

A view into the political landscape

With the 2022 elections less than two weeks away, Prof. Victor Andres C. Manhit discussed the dynamics of the 2022 national election campaigns, the profile of the Filipino voter, considerations in selecting a presidential candidate, and how social media has changed the way campaigns work

He highlighted how the economy in the next six months will be determined based on who wins and who will sit on the cabinet, citing that once the elected president gives their first State of the Nation address, the economy will move based on the statements made.

“Controlling inflation rate, ensuring higher pay for workers, creating jobs, and reducing poverty are the biggest issues that voters want to be addressed. For example, surveys have shown that 58% of respondents want the government to bring the rise of prices in check, while 4 out of 10 respondents see a higher take-home pay as an urgent priority,” Mr. Manhit added.

With more than 65.7 million eligible Filipino voters in the 2022 elections, Mr. Manhit sees an opportunity for a positive turnout, with more than 44% of registered voters being first-time voters and have taken their campaigning to social media.

“Social media is shaping the discourse; mainstream media is catching up. If the presidency is shaped by what is happening on social media, then imagine what governance would be and that for me is the great challenge,” Mr. Manhit added.

Generating discourse to foster BetterBanking

Each year, Security Bank organizes a “by-invitation only” economic forum to support its vision to become the most customer-centric bank in the Philippines — investing in its customers and in what matters most to them. Through this event, the Bank provides valuable information to arm business leaders and guide them in making sound business and financial decisions.

When the economic forum celebrated its tenth year in 2018, the Bank held its first regional economic roadshow where stakeholders from key business hubs in the country were able to hear from industry leaders first-hand. In the midst of the pandemic in 2020, the yearly event pivoted from a physical forum to an online event.

“As we keep a watchful eye on developments on the global [and local] stage, we remain very focused on helping our clients meet their goals for 2022. We look forward to continued collaboration with our partners as we all contribute to economic recovery,” said Sanjiv Vohra, Security Bank President and CEO.

 


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April inflation likely picked up — poll

PHILIPPINE STAR/ RUSSELL A. PALMA
A GASOLINE attendant fills a motorcycle at a gas station along T.M. Kalaw, Manila. — PHILIPPINE STAR/ RUSSELL A. PALMA

INFLATION likely accelerated beyond the central bank’s target in April, as food and oil prices continue to climb amid the ongoing Russia-Ukraine war and agricultural damage caused by Tropical Storm Agaton.

A BusinessWorld poll of 17 analysts yielded a median estimate of 4.6% for April inflation, matching the midpoint of the 4.2% to 5% forecast by the Bangko Sentral ng Pilipinas (BSP).

If realized, this would be faster than the 4% in March and the 4.5% in April 2021. It will match the 4.6% print seen in October.

Analysts’ April 2022 inflation rate estimates

April would also be the first time that inflation exceeded the BSP’s 2-4% target band since the 4.2% print in November 2021.

April inflation data will be released on May 5.

“Higher electricity rates in Meralco (Manila Electric Co.)-serviced areas, increased domestic petroleum prices as well as higher meat and fish prices are the primary sources of inflationary pressures during the month. Inflation pressures will also emanate from positive base effects. These could be offset in part by lower prices of fruits and vegetables and the broadly stable peso,” the BSP said on Friday.

Pump prices and electricity rates continued to rise in April, reflecting the volatility in global oil prices since Russia invaded Ukraine in late February.

China Banking Corp. Chief Economist Domini S. Velasquez said in an e-mail that inflation in April was driven by persistently elevated crude oil prices in the world market.

Year to date, gasoline, diesel and kerosene prices have increased by P18.45, P31.45, and P25.05 per liter as of April 26. A rollback in pump prices is expected on Tuesday, according to the Department of Energy (DoE).

In April, Meralco rates for typical households increased by around P107 due to rising generation charge. The overall rate for residential users in April inched up by P0.5363 per kilowatt-hour (kWh) to P10.183 per kWh.

“We have seen a broadening of inflationary pressures on other products in the consumer price index (CPI) basket, such as food…. This April, we will likely see higher food inflation partly driven by increasing transport costs and higher price of grains globally,” Ms. Velasquez said.

Security Bank Corp. Chief Economist Robert Dan J. Roces said inflation is likely to peak in the second quarter, before easing above 4% for the rest of the year.

“In terms of proportion, the food basket may have contributed approximately 1.4% to the headline inflation reading in April, while utilities gave 1.5% and transportation 1.0%. These estimates show that inflation remains mostly cost-push driven, and now fully reflects the effects of the Russia-Ukraine conflict on prices,” he said.

Makoto Tsuchiya, an economist at Oxford Economics, said inflationary pressure is expected to linger, given their forecast of “higher-for-longer global commodity prices,” which will affect the Philippines since it is a net commodity importer.

The agricultural damage due to Tropical Storm Agaton may also have temporarily pushed food prices higher in April, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

The Department of Agriculture estimated agricultural damage from Agaton reached P3.27 billion as of April 25.

Headline inflation in the first quarter stood at 3.4%, which is still within the BSP’s target. However, the central bank in March raised its inflation forecast for 2022 to 4.3%, cognizant of the effect of the Russia-Ukraine war on oil and commodity prices.

POLICY TIGHTENING?
The continued increase in commodity prices should strengthen the case for the central bank to begin tightening monetary policy, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said.

“Two years of exceeding the target means BSP should have hiked early last year since unlike our ASEAN (Association of Southeast Asian Nations) neighbors, the Monetary Board had clearly cut rates too low in 2020,” Mr. Neri said.

“The local economy’s recovery is clearly dependent on the reopening of the economy and has little to do with keeping interest rates repressive (or negative) or not,” he added.

The BSP has kept the 2% policy rate unchanged at a record low since November 2020.

Inflation quickened to 4.5% in 2021 from 2.6% in 2020, mainly due to low meat supply amid the African Swine Fever outbreak.

The economy expanded by 5.7% in 2021, a turnaround from the record 9.6% contraction in 2020. Economic managers expect GDP to grow by 7-9%, although the impact of the war may dampen recovery.

PNB economist Alvin Joseph A. Arogo said the central bank may go for a 50-basis-point (bp) increase for the rest of the year as recovery becomes more solid.

“We have a baseline forecast of two 25-bp rate hikes this year (25 bps on June 23 and another 25 bps on Sept. 22) on the assumption that the economy is poised to return to its pre-pandemic level by the second quarter of 2022,” Mr. Arogo said.

Security Bank’s Mr. Roces said the BSP could go as far as hiking rates by 75 bps and still be supportive of economic recovery.

“A 25-bp [increase] move this June is seen to remain ‘accommodative’ in the sense that it will still be far from the pre-pandemic rate of 4% yet enough to cover the differential versus the Federal Open Market Committee’s rate, remain supportive of credit recovery for productive purposes, and help rein-in local inflation as a preemptive measure for upside risks in the second half and beyond,” Mr. Roces said.

The US Federal Reserve raised policy rates by 25 bps in March. It is expected to hike rates by another 50 bps when the Fed’s meeting ends on May 4.

Last week, BSP Governor Benjamin E. Diokno said they may consider a rate hike in June as they expected strong economic growth in the first quarter.

First-quarter economic data will be released on May 12.

The Monetary Board will have its next policy review on May 19. — Luz Wendy T. Noble

Traditions compete with science for vaccine hesitancy among indigenous people in PHL

PHILIPPINE STAR/ RUSSEL PALMA
A health worker prepares a COVID-19 vaccine shot at a government vaccination site in Pasay City, April 25. — PHILIPPINE STAR/ RUSSEL PALMA

By Luisa Maria Jacinta C. Jocson

MARCELINO S. TENA, a tribe leader of the Dumagat community in Quezon province south of Manila, the Philippine capital, is wary of vaccines.

“Indigenous people (IP) are scared of injections,” he said in a Facebook Messenger chat in Filipino. “Since the coronavirus lockdown began, we IPs have been afraid of getting sick, infecting others and potentially dying of the virus.”

Members of the sea-faring indigenous group do wear face masks and keep their distance as a health protocol, but only when they leave their homes to go to the city.

“We don’t wear face masks in our community so we can continue to breathe the fresh air, fish in our waters and eat healthy food,” Mr. Tena said. “This is how we stay strong.”

More than 67 million of about 110 million Filipinos have been fully vaccinated against the coronavirus disease 2019 (COVID-19), about 13 million of whom were also injected with booster shots, according to the Health department.

In contrast, only 1.07 million of about 22 million indigenous people have been fully vaccinated, which is a concern as a fresh surge in infections are again sparking lockdowns in several countries including China, where the coronavirus is believed to have originated.

The government is racing to vaccinate more people as it reopens the economy and protect its population from future coronavirus variants.

The Philippines might experience another surge in coronavirus infections by May or June, similar to what other countries are experiencing now, according to the OCTA Research Group from the University of the Philippines.

Most indigenous communities follow health protocols, though they mostly stay in their areas, said Roda Tajon, a program coordinator at the Philippine Task Force for Indigenous Peoples’ Rights (TFIP).

“IPs feel safer in their communities,” she said in an e-mail. “They seldom go out and get exposed to infections.”

While indigenous peoples’ traditional lifestyles are a source of their resiliency, these can also pose a threat during a pandemic, according to the United Nations.  “For example, most indigenous communities regularly organize large traditional gatherings to mark special events e.g. harvests, coming-of-age ceremonies, etc. Some indigenous communities also live in multi-generational housing, which puts indigenous peoples and their families, especially the elders, at risk,” it added.

In many areas in the countryside, indigenous tribes treat illnesses with herbal medicines found in their ancestral lands.

“These are found to be very effective and safe,” Ms. Tajon said. “Aside from using herbal medicines, they are seldom exposed to COVID-19 cases because they usually spend their days on the farm. It was only when outsiders and returning residents came that cases escalated.”

While the capital region experienced a slew of back-and-forth lockdowns, IP communities were, for the most part, untouched by the pandemic frenzy.

“Within our ancestral domain, especially in the inner barangays, the pandemic did not affect their lives that much,” Maria Angelica P. Umingli, an Isnag from Kabugao, Apayao, said in a text message.

When a surge did occur within the Isnag community, rural health and disaster agencies moved quickly to contain the outbreak.

Ms. Tajon said pandemic lockdowns had affected indigenous people’s livelihood and worsened their lack of access to social services such as healthcare given their remote locations.

“Without any health workers present, IPs opted for self-treatments to common illnesses,” she added.

Vaccine hesitancy in these communities is common, largely due to the lack of health education.

“IPs are hesitant in receiving vaccines because they’re afraid of the supposed side effects. The Dengvaxia scare and disinformation on social media are also not helping.”

In Palawan and Mindoro provinces, indigenous people are afraid to visit rural health units for common ailments such as cough and colds for fear that they could get diagnosed with COVID-19, Ms. Tajon said. Some in Luzon and the Visayas avoided seeking treatment because they might be required to undergo testing that they can’t afford.

“The lack of state healthcare workers for IPs also forced them to seek private doctors, which often left them indebted,” Ms. Tajon said.

In a study by the TFIP, pregnant indigenous women bore the brunt of the COVID-19 pandemic.

“Even before the pandemic, the ban on home birthing made it difficult for indigenous women to allocate resources and prepare,” according to the report.

Travel restrictions and testing requirements became more burdensome forcing them to leave their homes months before they give birth and stay with relatives.

Their companions, usually husbands, had to undergo antigen testing, which costs a lot. “Without enough resources, they barely get by and survive.”

Ms. Umingli said her community would have been open to traditional medicines and vaccinations if these were taught to them properly.

“Some are reluctant at first but with proper explanation and understanding, they were convinced and got their vaccine,” she said.

Apart from being ill-informed, there is also no extensive data regarding indigenous people affected by the pandemic.

“Disaggregated data could have provided more groups the significant information to support the efforts in the provision of medical and relief services,” Ms. Tajon said.

“Vaccine hesitancy is not the main cause of the low vaccination rate, but the accessibility of public health services and health education for the people,” Filipino Nurses United Secretary-General Jocelyn S. Andamo said in a text message.

Fear of vaccines among IPs is understandable, Maristela P. Abenojar, president of Filipino Nurses United, said in a Viber message. “This is an issue that must be addressed by the government by strengthening the public health system.”

Other health experts said the state should boost vaccination efforts and create an inclusive, nationwide health campaign.

“Unless virus transmission is stopped, no one will be safe from getting infected, and from the emergence of new variants,” Teodoro B. Padilla executive director of the Pharmaceutical and Healthcare Association of the Philippines, said in an e-mail.

“While vaccination is not mandatory, all efforts must be exerted to include the IPs as priorities, and address their specific needs and cultural backgrounds to secure their free, prior and informed consent,” he added.

The coronavirus has sickened 3.69 million and killed more than 60,000 Filipinos. Globally, half-a-billion people have been infected, with more than 6 million deaths, according to the Worldometer website, citing various sources including data from the World Health Organization.

“These figures show the catastrophic impact of COVID-19 on the lives and health of the people. Members of the IP communities have not been spared,” Mr. Padilla said

IPs should have access to correct information about the advantage of being vaccinated against COVID-19, Ms. Abenojar said.

Mr. Tena, the Dumagat tribesman, said the coronavirus is just a speck in a sea of government shortcomings. “COVID is not the biggest issue we face that is threatening our livelihood and way of life.”

Election spending seen to boost growth this year

Election posters are seen in San Francisco del Monte in Quezon City, April 06, 2022. — PHILIPPINE STAR/ MICHAEL VARCAS

ELECTION-RELATED spending may boost the Philippine economy’s growth momentum this year, with media, advertising and services sectors seen benefiting the most, according to economists.

“In previous elections, election-related spending would spur the economy and an estimate of about 0.5% to 1% is usually added onto annual economic growth,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail. “I suspect the impact may be the same on an annual basis.”

Economic managers expect gross domestic product (GDP) to expand by 7-9% this year, after growing by 5.7% in 2021.

The gradual reopening of the economy, plus election-related spending, is expected to boost household consumption this year. However, higher oil and commodity prices may dampen consumers’ willingness to spend.

Mr. Asuncion said businesses involved in printing campaign materials and advertising usually benefit from election spending.

“Accommodation and transport sectors also get a fair share of election-related revenues,” he added.

Ateneo de Manila University Economics Professor Leonardo A. Lanzona said in a Viber message that there would be short-term gains in GDP for the services sector.

“However, towards the end of the year, this will eventually lead to inflation. Nevertheless, these outcomes may not be as the previous years since the government seems to have taken a neutral stance. We will have a better sense of the government’s activities later this week,” he said.

Ateneo de Manila University professor and former Socioeconomic Planning Secretary Cielito F. Habito on Thursday said elections in the past contributed about one percentage point to growth, although this could be less now.

“This time, in the sense, a lot of it going into expenses in both mainstream and social media and perhaps a large part of it in social media,” Mr. Habito said at the virtual Security Bank Corp. economic forum on Thursday.

The campaign period for the national elective posts started on Feb. 8, while those for local elective posts began on March 25. The campaign period ends on May 7, with the elections scheduled for May 9.

However, the Development Budget Coordination Committee (DBCC) in a report last December said the state spending ban before the elections may disrupt government infrastructure projects and delay reforms.

“The implementation of the government’s infrastructure projects may be disrupted, as public works and the release of public funds during the election period are prohibited under the Omnibus Election Code of the Philippines,” it said.

The ban on public works started on March 25 and runs until May 8. — Tobias Jared Tomas